Egypt plans to offload $1.9B state-owned assets to private entities via IPO initiative

Newsletter

13 Jul 2023

Egypt plans to offload $1.9B state-owned assets to private entities via IPO initiative. Prime Minister Mostafa Madbouly announced that Egypt has signed contracts worth $1.9 billion with the private sector, to sell state-owned assets under its initial public offering (IPO) program. From these contracts, the government expects to realize $1.6 billion in proceeds, with the remaining amount allocated in Egyptian pound. Further, the Prime Minister disclosed that additional contracts valued over $1 billion are set to be announced soon. Madbouly also cited a report from the United Nations Conference on Trade and Development (UNCTAD), revealing that Egypt’s foreign direct investment (FDI) rose to $11.4 billion last year, a significant increase from $5.2 billion in 2021. The government had previously announced plans to offer shares in up to 32 companies on the Egyptian Exchange (EGX) to strategic investors. (Arab Finance)

Egypt's cumulative revenue reaches EGP 1.5T in 2022/23 fiscal year, says Maait.
During the fiscal year 2022/2023, Egypt experienced an 11.5% growth in total revenues, reaching EGP 1.501 trillion, according to Finance Minister Mohamed Maait. The tax revenue showed a record growth of 23%, contributing EGP 1.211 trillion. Despite an increase of 16.3% in total expenditures, Egypt secured a primary surplus of EGP 157 billion. The overall deficit was about EGP 618 billion, expected to be 6.2% of the GDP. The government plans to reduce debt by 75% within the next four to five years. (Arab Finance)
Egypt aims to raise annual income to $191 billion by 2026.
Egypt's Prime Minister, Mostafa Madbouly, has announced plans to boost the country's annual dollar revenues from the current $70 billion to $191 billion by 2026. The plan will involve enhancing revenues from several sources: a 10% annual increase in the Suez Canal's earnings and overseas worker remittances, and a 20% boost in tourism and export revenue. The Suez Canal reported approximately $9 billion in revenue in the last fiscal year. The government has set a target of $15 billion in revenue from the tourism sector for the current year. (Asharq)
Egypt plans to increase dollar income by $70B in the next three years.
Egypt aims to raise its US dollar revenues by approximately $70 billion over the next three years, as stated by Prime Minister Mostafa Madbouly during a press conference on July 11th. The government's goal is to increase the country's total hard currency revenues to around $191 billion by 2026. The plan includes annual increases of about 10% from the Suez Canal earnings and remittances from Egyptians overseas, alongside a 20% annual rise in tourism and export revenues. Additionally, the government aspires to amplify dollar revenues from foreign direct investments (FDI) by approximately 10% per year over the coming three years. (Arab Finance)
Egypt aims to obtain $3B in funding to address dollar shortage.
Egypt aims to secure $3 billion in financing starting fiscal year 2023/2024, to close its USD shortfall and decrease debt, announced Finance Minister, Mohamed Maait. The finance goal is intended to be met through new Samurai bond issuances and various other avenues. Maait further highlighted a revealed credit guarantee from the African Development Bank (AfDB) and anticipates an additional guarantee for infrastructure from the Asian Infrastructure Investment Bank (AIIB). In addition, the government aspires to bring down the debt-to-GDP ratio to 94% in the 2024/2025 budget. Maait emphasised the impact of currency exchange and interest rate fluctuations on the Egyptian economy. (Arab Finance)
European Union for reconstruction extends 532 million USD in development funding to Egypt's private sector.
The European Bank for Reconstruction and Development (EBRD) has approved over $532 million in development financing for Egypt's private sector. This includes $400 million for the National Bank of Egypt, targeting small to medium enterprises, especially those run by young entrepreneurs, and $100 million for Banque Misr, focusing on similar businesses in under-served areas. The EBRD also approved a $32.5 million financing for the Mediterrania Capital IV fund, intending to inject €350 million into medium-sized companies in healthcare, retail, finance, and manufacturing sectors in Egypt, Tunisia, and Morocco, prioritizing female-led businesses. (Hapi Journal)
Hermes selected by Talaat Mostafa as financial consultant for historic hotel acquisitions.
Talaat Moustafa Group Holding, through its 83.3%-owned hotel arm, Arab Company for Hotel and Tourism Investments (Ikon), has put forth a proposal to acquire significant stakes in several hotels across Cairo, Alexandria, Luxor, and Aswan. The targeted hotels include Sofitel Old Cataract Aswan, Movenpick Resort Aswaq, Sofitel Winter Palace Luxor, Schneigenberger El Tahrir, Schneigenberger Cecil Alexandria, Marriott Mena House, Marriott Cairo, and Omar Khayyam Casino, all of which are currently owned by the Egyptian General Company for Tourism and Hotels (Egoth). Talaat Moustafa Group has appointed EFG-Hermes as the financial advisor for the potential acquisition. (Hapi Journal)
US dollar continues to slump as pound sterling soars to 15-month high.
The US dollar fell to a two-month low ahead of US inflation data release, while the British pound hit a 15-month high due to expectations of the Bank of England raising interest rates. The Japanese yen also rose, reaching a one-month high as it surpassed 140 against the dollar, influenced by falling US Treasury yields and anticipated Bank of Japan's policy adjustments. Investors eagerly await the US inflation data, expected to show a 5% year-on-year rise in June's core inflation. This comes as the dollar index drops to a two-month low of 101.34, extending losses due to near completion of the Federal Reserve's monetary tightening cycle. (Hapi Journal)
Chinese 'TEDA' invests $1.6 billion in the Suez economy through 140 companies.
The "TEDA" industrial city in the Suez Canal's economic zone has seen a total investment of $1.6 billion over 15 years through approximately 140 companies, creating about 5,000 jobs, as per a statement from the Suez Canal economy. This Chinese investment, located in the northwest of the Gulf of Suez, aims to mimic Beijing's "Tianjin" industrial city, engaging in industrial, commercial, and real estate investment. (Economy Plus)
Government's stake sale prompts Al Ezz Dekheila's removal from EGX.
Al Ezz Dekheila, a subsidiary of Ezz Steel, is to be voluntarily delisted from the Egyptian Exchange (EGX) following the government's complete sale of its 31% stake in the company for $241 million. The move is part of Egypt's IMF-backed privatisation programme. Al Ezz Dekheila has offered to buy shares back from dissenting shareholders at a rate notably higher than their current market value, and plans to fund this buyback via foreign-currency loans primarily sourced from overseas banks. (Enterprise)