Egypt will merge seven or eight state-owned hotels into a single entity ahead of a listing on the EGX

Newsletter

24 May 2022

For our top talks today, firstly, Egypt will merge seven or eight state-owned hotels into a single entity ahead of a listing on the EGX, according to the Public Enterprises Minister Hisham Tawfik. The new entity will be offered to investors in coordination with the Sovereign Fund of Egypt (SFE) in the coming months, he said. The ministry hasn’t yet evaluated the finances of hotels owned by the Holding Company for Tourism and Hotels (HOTAC), Tawfik said, adding that the plan would not include Nile Ritz-Cartlon, owned by Misr Hotels Company, which is already listed on the EGX. HOTAC owns several leading hotels, including the Cairo Marriott Hotel, Marriott Mena House, Luxor’s Sofitel Winter Palace, and Aswan’s Sofitel Legend Old Cataract. (Bloomberg Asharq)

Secondly, the Egyptian Prime Minister Mostafa Madbouly has mandated the Ministry of Trade and Industry to cooperate with the export councils in Egypt to prepare a general worksheet aiming to double exports.
A separate worksheet shall be arranged by each export council in the country as well. Moreover, Madbouly has called for speeding up the process of announcing the available industrial land plots, the land allocation system under the right of usufruct, and the purchase and payment plans, as well as the procedures for obtaining necessary licences. (Arab Finance)
It is worth noting that Egypt aims to attract further local and foreign investments in the industrial sector, which will contribute to the gross domestic product (GDP), offer job opportunities, and support local manufacturing, according to the Minister of Trade and Industry Nevine Gamea.
She highlighted that she met with the officials of the Industrial Development Authority (IDA) to consider accelerating the issuance process of required licenses and develop an integrated plan to develop services offered by IDA. On the other hand, exporters have demanded an incentive package for the required planned investments, suggesting the provision of local shipping lines for African countries. (Arab Finance)
Also, the Saudi Food and Drug Authority (SFDA) has approved Egypt’s modern export system.
The modern export system is applied on Egyptian exports to the European Union (EU) and major countries such as Japan, Australia, Canada, and the US. The new system is based on coding and tracking Egypt’s fresh agricultural exports including oranges, lemons, grapefruits, strawberries, grapes, guavas, pomegranates, and onions, under the supervision of the Central Administration of Plant Quarantine at the agriculture ministry. Egypt’s new export system controls all steps relevant to exports starting from planting to last-mile delivery. It is worth highlighting that Egypt was the world's top exporter of oranges and strawberries for the third year in a row in 2021, with the country's total agricultural exports exceeding 5.6 million tons. (Arab Finance)
In addition, millions of people worldwide are at risk of death due to surging prices of food amid the ongoing Russian invasion of Ukraine, according to the Egyptian Minister of Finance Mohamed Maait.
During his visit to London, the minister warned of global food insecurity, following warnings made by the United Nations (UN) and the Group of Seven (G7) concerning a possible wheat shortage. The UN secretary-general António Guterres recently said that the Russian-Ukrainian war, along with climate change and the Covid-19 pandemic, has put “tens of millions” at risk, commenting that “global levels are at a new high.” He stressed that Egypt’s reserve of wheat is sufficient until the end of 2022. (Financial Times)
Moving to our EGX and companies talks, KarmSolar, Egypt-based solar energy company and multi-utility provider and MARAKEZ, mixed-use real estate developers, signed a 22 MWs power distribution agreement for D5M, its latest retail destination that’s part of District Five, MARAKEZ flagship development in East Cairo.
Under the agreement, KarmSolar will invest in D5M’s electricity infrastructure and will be responsible for the operation and maintenance of the development’s internal electricity grid, as well as billing and payment collection for District Five tenants. The agreement also includes the establishment of a 1.7 MWp on-site solar station to power D5M with green renewable energy with the objective of expanding the solar capacity to power 100% of the whole project with renewable energy by 2027. D5M’s 22 MW Power Distribution Agreement brings KarmSolar’s total power distribution portfolio to over 40 MWs covering real estate developments and geographical regions across Egypt. (WAYA)
Ibnsina Pharma is getting into the hospital business with the acquisition of El Shorouk Hospital in a transaction worth 430 million EGP.
Ibnsina will pay 200 million EGP in cash and will settle existing debts owed by the hospital. The statement does not make clear who the seller is. Company representatives did not respond to Enterprise’s request for comment. What they’ve bought: Ibnsina will acquire the hospital’s real estate and operational assets, as well as the operating company. The 105-bed hospital serves residents across Shorouk City and neighboring Madinaty, Rehab, Badr City, New Cairo, and East Cairo. (Economy Plus)
Fawry has postponed plans to list its shares in the US due to the current sell-off in US tech stocks. Fawry had been exploring an SEC-registered secondary offering with plans to create an American depositary shares (ADS) program to allow it to list.
The company will continue to monitor market conditions. US tech stocks are deep in bear territory: The tech-heavy Nasdaq has tumbled 30% from its November peak as rising interest rates and fears of an oncoming recession send investors fleeing growth stocks. Growth stocks don’t usually pay out dividends, tend to have higher valuations and rely on future growth projections to attract investors, making them more vulnerable in an environment of rising interest rates. (Enterprise)
The Tenth of Ramadan for Pharmaceuticals Industries and Diagnostic Reagents (Rameda) (RMDA) has concluded the acquisition of an anticoagulant drug.
The deal comes within the framework of Rameda’s growth strategy aiming at boosting its portfolio of medicines through acquiring promising medicine products. The new acquisition is sought to support the company’s growth as the anticoagulant drug recorded a compound annual growth rate (CAGR) of 87% in the market during the period from 2018 until 2021. The company is expected to generate annual revenue of around EGP 30 million from the newly acquired drug. Rameda is an Egypt-based pharmaceutical company that manufactures both human and veterinary pharmaceuticals. (EGX)
Sylndr, an Egypt-based online retailer of used cars, has raised 12.6 million USD in a pre-seed funding round.
The round was led by RAED Ventures, with the participation of Algebra Ventures, Nuwa Capital, 1984 Ventures, and Global Founders Capital, along with a number of regional and global angel investors. The company plans to “build trust” in the used cars market by offering customers an experience free of hassles when they purchase, sell, or finance their cars. The capital raised will be dedicated to supporting Sylndr’s operational capabilities, technology infrastructure, and brand awareness. The company also aims to double the size of its team by the end of 2022. (WAYA)
Orascom Construction Plc (ORAS) has announced that its subsidiary Suez Industrial Development Company (SIDC) signed an agreement with Al Ahly Capital Holding (ACH),
the investment arm of the National Bank of Egypt (NBE), for the joint development of a 2.2 million square meters (sqm) industrial park in Abu Rawash in the city of Giza. SIDC will hold 25% of the project company and will be the lead developer of the project. The location of the industrial park is connected via multiple transportation links to Greater Cairo to Alexandria and other governorates, which allows it to become a major hub for a variety of sectors including logistics, light industries, and small- and medium-sized enterprises (SMEs). (Arab Finance)
International Company for Agricultural Products (IFAP) has reported around 539.06% year-on-year (YoY) hike in net profits after tax during the first nine months of the fiscal year 2021/2022, recording 95.303 million EGP.
The company’s net sales surged to EGP 397.16 million in the July-March period, from 352.862 million EGP in the comparative period the year before. International for Agricultural Products is engaged in farming, trading, and distribution of crops and seeds. The company purchases cotton flowers and cotton seeds from producers, undertakes contracting activities with cotton ginning companies, and trades in cotton fibers and seeds. (EGX)
Saudi food conglomerate Savola Group is close to acquiring the Egyptian Belgian Company — best known for its Ole-branded baked goods — in a transaction worth c. 600 million EGP.
The acquisition would see the company acquire both the manufacturer’s assets and its brand name. Savola has been eyeing acquisitions in Egypt’s food sector for a while: The company said last year that it is considering acquiring food companies in Egypt. Savola said at the time that it would target companies who produce items not covered by its existing portfolio. Savola is already a big player in our market — even if it’s not a “household name”: The company is behind popular local cooking oil, ghee, pasta, and sugar brands including Rawabi ghee, Afia oils, and El Maleka and Italiano pastas. Its products are sold across the region, including in the Gulf, Sudan, and Turkey. Egypt accounted for about 17% of Savola’s revenues in 1Q 2022, according to the company’s investor presentation. (Hapi Journal)
Huawei Technologies has signed a memorandum of understanding (MoU) with King Salman International University (KSIU) for the establishment of “Huawei ICT Academy” at the three campuses of the university.
The three campuses are located in El Tur, Sharm El Sheikh, and Ras Sudr in Sinai. Under the MoU, both Huawei and KSIU aim to improve capabilities of young talents by sharing knowledge in the information and communication technology (ICT) sector. The partnership will also grant students international accreditation that supports the localization of the technology industry in Egypt, as well as help the country to become a technology regional hub in the Middle East and North Africa (MENA). (Arab Finance)