A plan to sell stakes in state-owned companies, including in two military-affiliated firms, was revived by Bloomberg -- Egypt, as part of a plan to restore a battered economy and secure much-needed foreign currency.
Prime Minister Mostafa Madbouly told reporters on Wednesday that the government would offer stakes in 32 firms in a wide range of sectors, from banking and oil to real estate, insurance and ports. The move is billed as a part of Egypt's broader push to reform an economy that was tipped into crisis by Russia's invasion of Ukraine, which sent food and energy prices going up.
He said that the stake sales should include share offerings to the public, block sales to strategic investors and a combination of the two. Madbouly told Bloomberg that the government doesn't have a target value for the sales.
Three banks - Banque du Caire SAE, Arab African International Bank, United Bank and Wataniya, an army-linked fuel-distribution company are up for grabs, as well as three banks that are up for grabs.
The potential sales are closely watched by investors after Egypt s three currency devaluations in the past year indicated an effort to reverse years of economic and fiscal missteps. The country, one of the most indebted in the Middle East, secured a $3 billion IMF program that is anticipated to unlock billions of dollars more in funding because of the devaluation.
Madbouly said officials had to devise various scenarios for the challenges ahead, and needed to have a clear vision of the path of the Egyptian economy for at least two years. The government is following through on pledges to back out of some industries and support the private sector, as part of the deal with the International Monetary Fund. At the same time, the state must cut spending without affecting the most vulnerable parts of the population and deal with a rising debt-servicing bill.
The risks ahead for Egypt were made even clearer on Tuesday, as Moody s Investors Service downgraded the country s credit rating to B 3 from B 2. Moody s cited reductions in external buffers and shock absorption capacity while the economy undergoes a structural change towards a more export- and private sector-led growth model under a flexible exchange-rate regime. The program of 2016 saw little success in selling stakes in the vast majority of the state-owned firms put on the auction block over a period of years. Officials blamed the downturn in global market conditions and delayed pressing ahead with other offerings at the time.
Among the companies included in the latest offering are:
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