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Sunday, 19 March 2023

SFE open to selling 100% of Safi, Wataniya to strategic investors -Soliman

No limits on Safi, Wataniya stake sales -SFE’s Soliman: The Sovereign Fund of Egypt (SFE) could sell up to 100% of military-owned firms Safi and Wataniya to strategic investors depending on market appetite, Asharq Business quotes our friend SFE CEO Ayman Soliman as having said. The news outlet had reported last week that the government was looking to sell at least 10% in each company as part of its privatization drive and that CI Capital had been tapped to manage the sales. “There will be no upper limit” to the size of the stake on offer, Soliman said on the sidelines of an event in Cairo.

How much will be up for grabs? It all boils down to investor appetite, Soliman said, emphasizing that the SFE aims to be “very flexible” and “responsive to the market” in its approach to the sales.

It’s not just Gulf wealth funds that are showing interest, Soliman says: The investors eyeing Safi and Wataniya include international, regional, and local players, Soliman told Asharq, adding that the companies have received interest from a large number of investors.

Remember: CI Capital opened talks with prospective investors last week in a roadshow that is expected to finish next month.

Ownership limits have reportedly been a sticking point in negotiations for other state companies: Sale talks for stakes in Vodafone Egypt and several port operators have reportedly stalled in recent weeks due to disagreements over ownership. Those sale processes are not being managed by the SFE. Recent reports have suggested that the government has been unwilling to meet the Qatar Investment Authority’s demand for all of Telecom Egypt’s (TE) 45% stake in Vodafone Egypt and for majority ownership of the Port Said and Damietta container terminal operators.

A lot is at stake: Concerns over Egypt’s progress in selling state assets are contributing to the shortage of hard currency and pressure on the EGP, which have intensified in recent days despite three devaluations over the past year. Portfolio investors are continuing to sit on the sidelines until they see signs that the government is delivering on its commitments under the IMF program, which include accelerating privatization and maintaining a fully flexible exchange rate.

Background: The SFE was earlier reported to have planned to sell a 20-30% stake in Safi and Wataniya to strategic investors before proceeding with public share sales when global market conditions have improved. The fund has been restructuring the two firms ahead of the share sale. Safi and Wataniya are both on the list of the 32 state-owned companies the Madbouly government plans to offer to strategic investors and the EGX by the end of 1Q 2024.

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