Is the state readying logistics companies for EGX debuts in 2023?
More color on the state’s 2023 IPO pipeline: The Madbouly government plans to IPO as many as four state-owned maritime and land transport companies during 1Q 2023 as it looks to reboot its stalled privatization program, the domestic press reports, citing unnamed sources.
- Heading to the EGX: Damietta Container & Cargo Handling Company (DCHC) and Port Said Container & Cargo Handling Company (PSCCHC) will be offered on the EGX, the sources reportedly said.
- Listing on the Nilex: The Egyptian Company For Maritime Transport (Martrans) and General Egyptian Warehouse Company will be offered on small-cap index.
What’s up for grabs: The state plans to sell at least 25% of the companies to public investors, the sources said. The companies are currently being restructured to meet listing and IPO requirements, they added.
It’s still unclear whether port owner-operators themselves could be privatized. Transport Minister Kamal El Wazir said in May that the government was looking to merge seven ports into a holding company and possibly offer it on the EGX and / or to strategic investors. He made the remarks after the news of the state’s privatization strategy broke in spring. The minister appeared to walk this back at an event last week, saying, “Egypt does not sell its ports.”
Gulf investors are interested in the Suez Canal: Emirati port operators have shown significant appetite for Egypt’s Red Sea ports in recent months, with Abu Dhabi Ports taking over management of Ain Sokhna port and acquiring majority stakes in two local shipping companies. Qatar now looks to be getting in on the act and is studying investment in Damietta port.
REFRESHER- The government is looking at how and when to reboot its privatization program with recent listing changes and a new pre-IPO fund set up by the Sovereign Fund of Egypt (SFE) in September. The fund will offer stakes in state-owned companies to strategic investors and sovereign funds ahead of listing them on the bourse. The fund plans to market several state companies — including the military-owned firms Safi and Wataniya — to strategic investors ahead of IPOing them on the EGX. Neither Safi nor Wataniya will make their EGX debuts this year but will see a private stake sale before year end.
Roadshows are happening: The Sovereign Fund of Egypt is about to hit the road to market stakes in companies including bottled water maker Safi and filling station operator Wataniya. EGX boss Rami El Dokany is just back from the UAE leg of a roadshow that aims to drum up interest in public equities.
What about the private sector pipeline? Dokany said in September that the EGX is in “serious talks” with five or six private sector companies interested in listing, stressing that simplified listing procedures are helping drive interest. Petrochemical, energy, fuel, and fertilizer companies are among those interested, he suggested.
But, but, but… As always with reports of companies looking to IPO: It’s all about market conditions.