Wednesday, February 28, 2024

Egypt will offer as much as full ownership of military-owned businesses | Middle East News

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Egypt will offer up to 100% stakes in a mineral water company and an oil company currently owned by the military, the minister said.

Egypt will offer as much as full ownership of a mineral water company and an oil company currently owned by the military, continuing to seek private investment for companies which President Abdel-Fattah El- Sisi, could be more open to the public.

The National Water Production and Bottling Company (Safi) and Wataniya Petroleum were chosen as the first two companies for the initiative, Planning Minister Hala El-Saeed said Thursday.

“We aim to offer up to 100% stakes in these companies to local and foreign investors in the first quarter of 2021,” she said by phone. After an initial offer to private investors, the companies could then be listed on the Egyptian stock exchange.

The move is part of a larger initiative to relinquish control of some companies from the National Service Products Organization, which is affiliated with the Ministry of Defense.

Egypt, which launched a massive economic reform program about four years ago, has reshuffled to reorganize and revitalize state-owned enterprises and attract foreign investors who have so far been largely drawn to the debt and the energy industry of the North African nation.

“There are other companies in the pipeline,” El-Saeed said. “The country wants to encourage the private sector to be the main partner of the government to achieve sustainable and inclusive economic growth.”

The decision to offer stakes in some military companies follows a proposal last year from El-Sisi, who led an overhaul of the country’s infrastructure. The military has direct and indirect interests in a range of industries, from food production to cement.

The Egyptian sovereign wealth fund will help promote the chosen companies and could also invest in some of the issues.

“We are targeting benchmark investors to partner with the fund to acquire these assets and the fund aims to hold a minority stake for a future IPO with a broader investor base,” said its director general, Ayman Soliman, in an interview. .

The fund is keen to invest in both companies because of “the quality, governance and therefore the investment capacity of these,” he said.

(Updates with Minister’s comment in sixth paragraph)
– With the help of Tarek El-Tablawy.

© 2020 Bloomberg LP


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