Egypt’s cabinet approved the pre-listing procedures for military companies, petrol stations operator Wataniya Petroleum and water company National Company for Producing and Bottling Water (Safi), as part of the government’s broader strategy to offload minority stakes in at least 20 state-owned enterprises on the local bourse, a cabinet statement showed Wednesday.
The initial public offering (IPO) of Safi and Wataniya follows the sale of a 51% stake in state-owned Arab Investment Bank (AIB) to EFG Hermes Holding in a deal valued at $163 million (EGP 2.55 billion) in May 2021. The deal was the country’s first privatisation since 2006 when it sold a majority stake in the Bank of Alexandria.
The cabinet did not give additional information on the mechanism or timing of the sales. However, listing on the Egyptian Exchange (EGX) is expected to involve restructuring that could clear the way for a pre-IPO sale of equity to a strategic investor.
The North African country is seeking wider private sector participation in state-owned assets. Authorities plan to offer minority stakes in companies including Alexandria Mineral Oils Company, Eastern Tobacco, Alexandria Container as well as Cargo Handling and Abu Qir Fertilisers and Heliopolis Housing.
Egypt has been accelerating efforts to fight inflation, including the central bank’s decisions to raise its key interest rate and devalue the local currency against the US dollar to hedge the economy against the fallout from the Russia-Ukraine war.
