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Wednesday, 8 March 2023

Telecom Egypt stake sale possible, company confirms

The gov’t is studying a stake sale in TE: The Finance Ministry yesterday confirmed that the government is working on a feasibility study regarding the sale of an undisclosed stake in Telecom Egypt (TE), the state-owned telecom giant said in a disclosure (pdf) to the bourse yesterday. Reuters on Monday reported that the government is planning to sell 10% of the company’s shares, most likely to a local investor.

It’s early days: The government may decide not to go ahead with the stake sale after studying its options, the statement reads. The company could choose to securitize future receivables as an alternative means of raising capital, a source told Asharq Business earlier this week.

Advisors: Al Ahly Pharos and CI Capital are managing the transaction.

Shares continued to sell off yesterday: TE’s share price lost 4.5% to settle at EGP 25.55 during trading yesterday. The company has seen more than 8% knocked off its share price since the news broke on Monday.

Background: The state currently holds 80% in the EGX-listed company, with the rest in freefloat, according to TE’s website. The transaction would be worth some EGP 4.4 bn at TE’s current share price.

Is Qatar’s wealth fund interested? Representatives of the Qatar Investment Authority (QIA) expressed interest in purchasing a stake in TE during Prime Minister Moustafa Madbouly’s visit to Qatar last week, Al Mal reports, citing unnamed sources it says have knowledge of the matter.

Talks over TE’s stake in Vodafone Egypt are ongoing: This doesn’t mean Qatar is shying away from talks with TE to buy the telecoms company’s 45% in Vodafone Egypt, the sources told Al Mal. Talks have reportedly stalled over a disagreement about the size of the stake on offer. Bloomberg is reporting that both the QIA and Saudi wealth fund PIF have submitted offers for part of TE’s stake in Vodafone, without giving more details.

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