Egypt invites banks to pitch for AlexBank stake sale

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Egypt’s ministry of finance has invited banks to pitch for an advisory position on the sale of its 20 percent stake in Bank of Alexandria, a subsidiary of Italy’s Intesa Sanpaolo, two sources familiar with the matter said.

The invitation went to local and international banks, said the sources, declining to be identified as the matter is not public.

The finance ministry and Intesa Sanpaolo did not respond to emailed requests for comment. Bank of Alexandria could not immediately be reached for comment.

The ministry said earlier this year it was seeking to sell the 20 percent stake it still owns in the lender, also known as AlexBank. Intesa Sanpaolo bought the other 80 percent in 2006.

The Arab world’s most populous nation is grappling with an economy in crisis and its currency has depreciated by roughly half since Russia’s invasion of Ukraine last year. That prompted foreign investors to pull more than $20 billion out of Egyptian treasury markets.

Egypt signed a $3 billion rescue plan with the International Monetary Fund (IMF) in December that targeted $9.7 billion in foreign direct investment in the financial year ending June 30.

To prop up its economy, Egypt’s government announced in April last year it was seeking to attract investments of $10 billion in each of the coming four years, part of a program to increase private participation in the economy.

Progress on stake sales has so far been slow. In addition, Gulf countries Saudi Arabia, the UAE and Qatar – which have previously come to Cairo’s rescue with tens of billions of dollars – have toughened conditions of support.

Egypt, suffering a severe shortage of hard currency, has not sold any major assets for foreign currency since August. Those sales mostly went to Saudi Arabia’s Public Investment Fund (PIF).

Last month, Egypt sold 10 percent of Telecom Egypt on the Egyptian Exchange in local currency, raising EGP3.75 billion ($122 million).

Qatar’s finance minister said last month his country was committed to injecting $5 billion of investments into Egypt’s economy, as was promised last year.

Egypt’s central bank said last month it planned to fully divest its stake in United Bank as part of the government’s stake sale program and had appointed Barclays as international financial adviser.

That came shortly after Saudi Arabia’s PIF paused a plan to acquire the bank because of a disagreement with Egyptian authorities over its valuation, sources said at the time.