Egypt announces sale of $1.9 billion worth of state assets
Egypt announces sale of $1.9 billion worth of state assets
Egypt plans to sell a number of state owned assets as a way to raise its foreign currency reserves, offering a number of companies in the both the tourism and energy sector.
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Egypt is undergoing an effort to raise its foreign currency reserves after an agreed IMF loan [Getty]
Egypt has signed contracts to sell stakes in state assets worth a total of $1.9 billion as part of a programme to boost the private sector and raise scarce hard currency, Prime Minister Mostafa Madbouly said on Tuesday.
The stake sales are seen as crucial to Egypt's chances of easing prolonged pressure on the Egyptian pound, attracting badly needed dollars, and launching economic reforms under a $3 billion IMF loan programme.
Of the $1.9 billion, $1.65 billion would be paid in foreign currency, Madbouly said.
"Far from signalling that salvation is at hand, the IMF $3 billion loan announced in mid-December highlighted the challenges ahead & the limited assistance Egypt will receive to meet them."
— The New Arab (@The_NewArab) February 7, 2023
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The government had a target of raising $2 billion from stake sales by the end of June, but its efforts faced delays in recent months, driving down the value of the pound on the parallel market. The pound has lost about half its value against the dollar since early last year at the official exchange rate and inflation is at record highs.
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, a deal 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, said Planning Minister Hala el-Said.
"These are all done and binding," Said told Reuters after a press conference attended by senior members of the cabinet.
The stake in the hotels, which include historic properties in Cairo, Alexandria and Luxor, was awarded to ICON, the hospitality arm of Egyptian real estate group Talaat Mostafa , she said.
The government is about one-quarter through a list of 32 state companies that it announced it would sell stakes in, and is preparing stake sales in other companies for later, said Madbouly.
Egypt expects to increase its annual inflow of hard currency by $70 billion per year to reach $191 billion by 2026, he added.
Transactions the government expects to complete in the next few months include a more than $300 million deal for the Gabal El Zeit wind farm, and sales in military-owned Wataniya Petroleum and a power plant built by Siemens, Said told reporters.
(Reuters)
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