The UAE National Paints Holding acquired about 81% of the shares of the EGX-listed paints company Pachin

Newsletter

03 May 2023

The UAE National Paints Holding (NPH) acquired about 81% of the shares of the EGX-listed paints company Pachin. The value of the deal amounted to about 770.45 million EGP (25 million USD) after a long marathon of competition with several companies over the shares of the state company. The “Pachin” deal was implemented in Egyptian pounds, as Egyptian assets became attractive to foreign investors when priced in the local currency, but pricing in dollars was an obstacle. The deal is a positive sign for the government’s exit from companies in favor of the private sector, regardless of the small size of the deal’s value, but it is a good sign. (Bloomberg Asharq)

The Madbouly government is reportedly considering selling secondary stakes in state-owned, EGX-listed companies Abu Qir Fertilizers and Sidi Kerir Petrochemicals (Sidpec).
There is no publicly available information about the size of the possible transactions, the timeline, or who is advising. Officials are currently re-evaluating Abu Qir’s market value in light of a positive 1Q 2023 performance and the depreciation of the EGP. The fact that the two firms are already listed on the EGX as well as investors’ interest in the petrochemical and fertilizer sectors could make their inclusion in the government’s privatization program more likely. (Enterprise & Al Mal)
The Saudi and Emirati wealth funds together acquired more than 40% of the state-owned company last year.
The purchases were part of a broader acquisition drive which saw the funds spend USD 3.1 bn to buy government-owned shares of EGX listed companies. Some 30.5% of the company is still held (pdf) by state-owned entities, a 5.0% stake is held by the Abu Qir workers’ union, and the remainder (c.23%) is in free float. (Al Mal)
The Oil Ministry has extended its tender for 12 exploration blocks in the Mediterranean and Nile Delta until the beginning of June.
The tender was originally set to conclude on 30 April, but was extended to give companies more time to study the blocks offered. The tender includes six onshore blocks and six offshore blocks. (Al Mal)
The Egyptian Transport Ministry-affiliated AlKahera Company for Ferries and Maritime Transport (KCFMT) and Korean shipbuilder Dae Sun will build two MPC14K multi-purpose ships.
The agreement comes as part of Egypt’s plans to build a strong commercial fleet to boost its trade to regional markets and leverage its strategic location on the Red and Mediterranean seas. A plan to build more cargo ships in Egypt in cooperation with Dae Sun and other international firms is also in the works. KCFMT is owned by the Egyptian Port Authority. The addition of the two multipurpose ships comes as part of a wider plan to expand KCFMT’s fleet to a total of six high tech multi-purpose ships. (Al Mal)
The Sovereign Fund of Egypt has prequalified 17 consortiums to bid in its upcoming tenders for renewables-powered desalination projects.
The firms were chosen with the technical help of the Finance Ministry’s public-private partnerships (PPP) unit. More than 25 consortiums applied. It’s worth mentioning that the SFE is planning to have three or four of these plants tendered by 3Q 2023, an SFE spokesperson told Enterprise yesterday. Contracts for the remaining plants in the program’s first phase should be signed in the next 18-24 months, they added.
Egyptian tire manufacturing company Pyramids Tires has begun construction work on a cargo and passenger vehicle tire manufacturing hub in Saudi Arabia.
The hub, which is expected to begin operations in early 2025, will produce 300k tires per month, with plans to eventually produce 5.5 mn tires annually by 2026. Markets earmarked for export include Egypt, Europe and Africa. (Al Mal)
Finally, on the global level, the US Federal Reserve started its two-day policy meeting yesterday on Tuesday and Wednesday. It is expected that the Fed will hike the interest rates by a 25-bps as the Fed works to contain soaring inflation.
A 25-bps hike will push the fed funds rate to 5-5.25%, the highest level since 2007, and would be the tenth consecutive hike by the central bank since it started aggressively tightening policy to curb inflation last year. Traders widely expect the central bank to hike for the final time this week, before holding rates and starting to lower them towards the end of the year. Meanwhile, the UK and European central banks will continue their hawkish stances in the coming months, putting more pressure on the USD against major currencies. (Bloomberg & Zilla Capital)
An index of regional US banks fell almost 3% during trading yesterday following the collapse of First Republic Bank.
JPMorgan agreed to acquire most of the troubled lender on Monday while the rest will be taken over by the Federal Deposit Insurance Corporation, an arrangement that makes the bank the fourth victim of the recent banking crisis. Mid-cap banks, which have client deposits parked in interest rate-sensitive investment portfolios such as mortgage bonds, are also facing a massive challenge due to aggressive monetary policy tightening by the U.S. Federal Reserve. Their portfolios are now worth far less than what they valued them at in their books. (Reuters)