Economy

Egypt to sell stakes in 3 oil firms to ADQ for $800m

By Pramod Kumar

July 12, 2023, 5:28 AM

Egypt hydrogen — Revenues from the sale of stake in state assets have reached $5.6 billion so far, said Prime Minister Mostafa Madbouly

Egypt has signed contracts with the private sector to sell state-owned entities worth $1.9 billion under its initial public offering (IPO) privatisation programme, said Prime Minister Mostafa Madbouly.

The government has received $1.65 billion and the remaining $250 million will be received in the Egyptian pound, Ahram Online reported, citing Madbouly.

The new contracts include a deal to sell minority stakes in three oil and petrochemical sector companies to Abu Dhabi sovereign wealth fund ADQ for $800 million, an agreement to raise $700 million by offering capital in a portfolio of hotels, and a deal for a 31 percent stake in Ezz Dekheila steel company worth $241 million, Reuters reported citing planning minister Hala El Said.

Additional deals worth $1 billion will be announced shortly, Madbouly said, adding the government has finalised 25 percent of the first phase of the IPO initiative.

The World Bank’s International Finance Corporation will advise the government in preparing 50 more companies to join the IPO list.

In February the government announced a privatisation programme to sell stakes in 32 state-owned companies to garner $2.5 billion by the end of that fiscal year on June 31, 2023.

The programme is part of the commitments to the International Monetary Fund (IMF) under the 46-month $3 billion loan package.

Assistant prime minister Osama El Gohary said in June that the government intends to divest its stakes in 250 companies under its privatisation programme.

The government has decided that 250 of the 800 companies can be offered now, he said, adding the committee will decide on the timings for the rest.

Egypt is targeting $191 billion in US dollar revenues in 2026, up from the current figure of $70 billion, Madbouly said.

This includes $88 billion from commodity exports, $20 billion from tourism, $45 billion from remittances, $13 billion from foreign direct investments, $17 billion from the Suez Canal and other maritime services and $9 billion from outsourcing services in the ICT sector.

The prime minister said the government plans to refund 35 to 55 percent of income tax to investors within five years from the start of projects.

Egypt will shoulder 50 percent of the costs of utilities used in projects for up to 10 years, he stated.