The sale is part of the country’s privatization because it needs to meet a series of foreign debt obligations.
Egypt’s finance ministry announced the sale of a 9.5 percent stake in state-controlled Telecom Egypt for 3.75 billion Egyptian pounds ($122.4m) in a move aimed at pushing forward the government’s privatization program. .
The ministry said on Sunday that 162.2 million shares were sold at 23.11 Egyptian pounds ($0.75) each in a subscription that was 3.11 times oversubscribed. Another 0.5 percent of shares are now being 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 Exchange. Two local investment banks, CI Capital and Ahly Pharos, are handling the sale, according to market sources.
The ministry’s statement did not say which part of the shares were sold to local buyers as opposed to non-Egyptians. Egypt seeks to raise foreign currency by selling its assets.
Al Mal newspaper said on Thursday that Moon Capital, based in New York City, was among the bidders.
In February, Prime Minister Mostafa Madbouly disclosed a list of more than 30 state-owned companies to be sold to investors within the year, state-run Ahram media reported, adding that it including the National Company for Producing and Bottling Water (Safi) and Wataniya Kompanya sa Petroleum.
Madbouly pledged on April 29 to continue its sales program and sell assets worth $2bn by the end of June. Telecom Egypt is the second sale of state assets since then.
The sale comes as Egypt desperately needs privatization to meet a series of foreign debt obligations in the coming months.
Sunday’s announcement comes after Egypt pledged to the International Monetary Fund (IMF) that it would restore state participation in the economy and allow private companies a bigger role as part of a $3bn financial support package. package signed in December. It also agreed to move to a flexible exchange rate and slow down public investment in national projects.
The package covers a period of 46 months and will give the Egyptian government quick access to about $347m to help the debt-ridden country stabilize its balance of payments and budget.
The IMF’s stipulation that Egypt slows public investment and privatizes state assets comes after the state poured billions of dollars into major construction projects, such as the New Administrative Capital and New Alamein City, and to buy weapons from countries like Germany and Italy. Meanwhile, Egypt’s external debt has quadrupled over the past decade.
Egypt’s economy has been hit hard by higher oil and food prices following the coronavirus pandemic and the war in Ukraine, with the Egyptian pound weakening by more than 13 percent to a new low of more than 32 in the United States 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.