Egypt Mulls Majority Stake Offerings in More Public Firms

Tuesday 24 July 2018 02:10 PM

Egypt Bourse
Egypt Bourse

Egypt is considering adding companies to the list of state-run firms in which investors can secure majority stakes as it readies to launch a program aimed at reviving the battered public sector.

The government is planning to start with the sale of Heliopolis Housing and Eastern Tobacco in October, Public Enterprise Minister Hisham Tawfik said in an interview. So far, however, a majority offering is available only in Heliopolis, with 40 percent of the property developer to remain under state control.

“Our target is to improve the companies’ performance and to allow private sector participation in their boards,” Tawfik said, adding that this could come through “giving investors stakes in these companies and allowing them to have majority ownership in some of them.”

Egypt’s public sector has long been criticized as bloated and inefficient and officials have struggled to push the firms toward profitability.

The current program marks a first step toward attempting to strike a balance between efficiency, profitability and raising revenue for the government. The other three companies on offer in the first stage are Abou Kir Fertilizers, Alexandria Container & Cargo Handling and Alexandria Mineral Oils Co. Egypt is hoping to secure 30 billion pounds ($1.7 billion) from the first stage and 100 billion pounds from the offerings overall.

Alexandria Container and Eastern Tobacco, the country’s largest cigarette maker, will undergo 1-to-10 stock splits before being offered, Tawfik said.