The International Finance Corporation (IFC) was appointed this week as strategic advisor to the Egyptian government’s Asset Monetisation Programme, under which it “will provide the government with technical assistance and advisory support to develop a strategy and implementation plan, help structure and prepare assets for sale… and ultimately implement selected approved transactions,” according to an IFC press release.
The agreement comes within the framework of government plans to sell stakes in state-owned companies to grow the role of the private sector in the economy.
“The IFC is uniquely placed to play this role given its neutrality, strong reputation, broad global experience in privatisation transactions, IPOs [initial public offerings], trade sales, and PPP [public private partnerships] tenders, multisectoral experience, and deep ties with strategic and financial investors focused on Egypt,” Prime Minister Mustafa Madbouli said during the signing ceremony.
While work on the agreement may still have to kick in, the government is not waiting around. Already there are deals in the pipeline, and news has come in about multiple offerings including IPOs and minority and majority stakes in companies in different sectors.
According to news reports, strategic investors are negotiating acquiring stakes in two pharmaceutical companies including the Chemical Industries Development Company (CID).
The government’s remaining 20 per cent share in the Bank of Alexandria could also be privatised. The Suez Canal Economic Zone (SCZone) is set for an IPO offering a 20 per cent stake in Port Said Container and Cargo Handling (PSCCHC) on the Egyptian Stock Exchange out of its 39 per cent stake.
The Qatari Sovereign Wealth Fund is also in negotiations to acquire a minority stake in a holding company that will include seven of Egypt’s five-star hotels.
All these offerings are part of ambitious government plans to sell stakes in 32 state-owned companies as part of its commitment to allow the private sector a greater role in the economy and to bring in much-needed hard currency to bridge its financing gap.
Source: State Information Service Egypt