The sale is part of the country’s privatization campaign, as it must comply with a series of external debt obligations.
The Egyptian 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) in a move aimed at boosting the program of government privatization.
The ministry said on Sunday that 162.2 million shares were sold at 23.11 Egyptian pounds ($0.75) each in a 3.11-fold oversubscription. Another 0.5 percent stake is now offered to Telecom Egypt employees until May 25.
The two-part sale will reduce the government’s stake in Telecom Egypt to 70 percent from the previous 80 percent, with the other 20 percent floating on the Egyptian stock market. Two local investment banks, CI Capital and Ahly Pharos, were managing the sale, according to market sources.
The ministry statement did not say how much of the shares were sold to local versus non-Egyptian buyers. Egypt has been looking to raise hard currency through its asset sales.
The Al Mal newspaper said Thursday that New York City-based Moon Capital was among the bidders.
In February, Prime Minister Mostafa Madbouly unveiled a list of more than 30 state-owned companies to sell to investors within the year, state media Ahram reported, adding that these include the National Water Production and Bottling Company (Safi) and Wataniya. Petroleum Company.
Madbouly promised on April 29 to go ahead with the sale program and sell $2 billion worth of assets by the end of June. Telecom Egypt is the second sale of state assets since then.
The sale comes as Egypt desperately needs the proceeds from the privatization to meet a series of foreign debt obligations in the coming months.
Sunday’s announcement comes after Egypt promised the International Monetary Fund (IMF) that it would reverse state involvement in the economy and allow private companies a much larger role as part of a $3 billion project. financial support package signed in December. He also agreed to move to a flexible exchange rate and curb public investment in national projects.
The package covers a 46-month period and will give the Egyptian government immediate access to some $347 million to help the indebted nation bolster its balance of payments and budget.
The IMF stipulation that Egypt would slow public investment and privatize state assets came after the state invested billions of dollars in massive construction projects, such as the New Administrative Capital and New Alamein City, and in the purchase of arms from countries like Germany and Italy. Meanwhile, Egypt’s foreign debt has quadrupled in the past decade.
Egypt’s economy has been hit hard by rising oil and food prices after the coronavirus pandemic and the war in Ukraine, with the Egyptian pound weakening by more than 13 percent to a new low above 32 per US dollar in January this year compared to March 2022.
About a third of Egypt’s 104 million people live in poverty, according to government figures, and many Egyptians rely on the government to keep basic goods affordable through state subsidies and other similar schemes.