Egypt’s Privatisation Programme: Updates, Potential Moves

Egypt has recently taken concrete steps towards the investment opportunities it offers for strategic investors or under the government’s initial public offering (IPO) programme, through which 32 state-owned companies are promoted to be tapped.

The key target of this action is bridging the $17 billion financing gap Egypt will witness over four years, providing US dollar liquidity in the local market, and opening a wide door for the private sector to play a greater role in the local economy by increasing its share in the economic activity to 65 percent instead of 30 percent.

This comes as a clear commitment from the Egyptian side to the International Monetary Fund (IMF) under its Extended Fund Facility for the country that allows it to receive a $3 billion loan in tranches through FY2025/2026.

All eyes on PACHIN PACHIN, a state-owned company specialised in manufacturing paints, has recently received two offers from local and Arab investors to acquire 100 percent of the company shares.

The company, which is already listed in the Egyptian stock market with 55 percent of its shares owned by the government, is among the 32 state-owned companies Egypt offers under the IPO programme.

The competition is ramping up between an Egyptian and a UAE company to acquire PACHIN.

Egypt-based Eagle Chemicals raised the share price of the company to EGP 37, up from the initial price set at EGP 34 and above the UAE company’s proposed price of EGP 36.

The UAE National Paints submitted a request to Egypt’s EGX in March to acquire 100 percent of the Egyptian company with a price of EGP 34 per share.

The company this week raised the price of the share to EGP 36, after receiving the approval of Egypt’s Financial Regulatory Authority (FRA).

An Egyptian company had earlier offered to acquire the company with a price of EGP 35 per share. The FRA has also prolonged the validity of the purchase for one day to end on 4 April.

Abu Dhabi Ports Group taps SCZONE opportunities Egypt’s Suez Canal Economic Zone (SCZONE) said it has greenlighted a number of partnership projects with Abu Dhabi Ports Group, with investments worth hundreds of millions of pounds to be implemented in the sea ports affiliated to the SCZONE in East Port Said, West Port Said, Arish, and Ain Sokhna.

According to the SCZONE, AD Ports Group will be responsible for the construction and development of superstructure, management, operation, and handing over of a multi-purpose bulk terminal for oil services at East Port Said berths with a total length of 1.5 km.

Also in March, the AD Ports Group and Egyptian Red Sea Ports Authority signed a concession agreement extending over 30 years in order to develop and operate a multi-purpose terminal at Safaga Port, a strategic location on the Red Sea coast in eastern Egypt, which will be operational in the second quarter of 2025.

The terminal will be constructed with a capacity to handle five million tons of dry bulk and general cargo with one million tons of liquid bulk, 450K TEUs of containerised cargo, and 50K CEUs of RORO.

Additionally, the AD Ports Group and the General Authority for the SCZONE inked agreements to develop two cement terminals in Arish Port and West Port Said Port, which requires a combined investment worth EGP 1 billion.

Egypt’s President Abdel-Fattah El-Sisi met with the CEO of AD Ports Group Mohamed Juma Al-Shamisi early in March, and the UAE group showed a great appetite to tap the investment opportunities Egypt offers.

Telecom Egypt out of the race According to sources familiar with the negotiations, Egypt's government has recently decided to suspend the sale of an additional stake in the state-owned Telecom Egypt because of market conditions, three sources close to the talks said.

Earlier in March the company said in a disclosure sent to the EGX that it is considering floating an additional stake of the company in the EGX in 2023.

Thirty percent of the company’s shares are already listed in the EGX. It is worth noting that Qatar Investment Authority was reportedly eyeing a stake in Telecom Egypt.

Safi, NPC under offering process Egypt has started the offering process of the two military-affiliated National Petroleum Company (NPC) and National Co. for Natural Water in Siwa (Safi) to investors on 15 March with no updates announced from neither the government nor the Sovereign Fund of Egypt on this process.

The procedures of offering the two companies are carried out through an IPO advisor who will communicate with investors and make the data of the two companies available to them.