Global Courant 2023-05-14 20:43:02
The sale is part of the country’s privatization drive as it must meet a series of foreign debt obligations.
Egypt’s finance ministry has announced the sale of a 9.5 percent stake in state-controlled Telecom Egypt for 3.75 billion Egyptian pounds ($122.4 million).
The ministry said on Sunday that 162.2 million shares had been sold at 23.11 Egyptian pounds ($0.75) each in a subscription that was 3.11 times oversubscribed. Another 0.5 percent of the shares will now be offered to employees of Telecom Egypt until May 25.
The two-part sale will reduce the government’s stake in Telecom Egypt to 70 percent from the previous 80 percent, while the other 20 percent will float on the Egyptian Exchange. According to market sources, two local investment banks, CI Capital and Ahly Pharos, led the sale.
The ministry’s statement did not say what proportion of the shares were sold to local buyers as opposed to non-Egyptians. Egypt has attempted to raise foreign currency through asset sales.
The Al Mal newspaper said Thursday that Moon Capital, based in New York City, was one of the bidders.
In February, Prime Minister Mostafa Madbouly announced a list of more than 30 state-owned companies that will be sold to investors within the year, state-run Ahram media reported. Petroleum Company.
Madbouly pledged on April 29 to go ahead with the sales program and sell $2 billion worth of assets by the end of June. Telecom Egypt is the second sale of state property since then.
The sale comes as Egypt urgently needs privatization proceeds to meet a series of foreign debt obligations in the coming months.
Sunday’s announcement comes after Egypt promised the International Monetary Fund (IMF) it would roll back state involvement in the economy and give private companies a much bigger role as part of a $3 billion financial support package signed in December . It also agreed to move to a flexible exchange rate and curb government investment in national projects.
The package covers a 46-month period and gives the Egyptian government immediate access to approximately $347 million to help the debt-ridden country strengthen its balance of payments and budget.
The IMF’s determination that Egypt curb public investment and privatize state assets came after the state poured billions of dollars into massive construction projects, such as the new administrative capital and the new city of Alamein, and arms purchases from countries such as Germany and Italy. Meanwhile, Egypt’s external debt has quadrupled over the past decade.
Egypt’s economy has been hit hard by higher oil and food prices due to the coronavirus pandemic and the war in Ukraine, with the Egyptian pound weakening more than 13 percent to a new low of more than 32 against the US dollars in January this year compared to March 2022.
According to government figures, about a third of Egypt’s 104 million people live in poverty, and many Egyptians depend on the government to keep basic goods affordable through state subsidies and other similar schemes.
