According to Prime Minister Mostafa Madbouly, Egypt has inked contracts to sell shares in state assets for a total of $1.9 billion as part of a drive to strengthen the private sector and raise limited hard currency.
The share sales are thought to be essential for Egypt's hopes of alleviating persistent pressure on the Egyptian pound, attracting desperately needed money, and starting economic reforms under a $3 billion IMF loan package.
According to Madbouly, $1.65 billion of the $1.9 billion would be paid in foreign currency.
By the end of June, the government intended to raise $2 billion through share sales, but due to delays, the value of the pound on the black market has fallen. At the official exchange rate, the pound has lost roughly half of its value versus the dollar since early last year, and inflation is at all-time highs.
According to Planning Minister Hala el-Said, the new contracts entail the sale of minority stakes in three companies in the oil and petrochemical sectors to Abu Dhabi's sovereign wealth fund ADQ for $800 million, the offering of capital in a portfolio of hotels to raise $700 million, and a deal for a 31% stake in the steel company Ezz Dekheila (IRAX.CA) worth $241 million.
ICON, the hospitality division of Egyptian real estate giant Talaat Mostafa (TMGH.CA), was given the share in the hotels, which also comprise ancient buildings in Cairo, Alexandria, and Luxor, she added.
According to Madbouly, the government has sold holdings in nearly a quarter of the 32 state-owned businesses in which it had previously said it would do so, and it is prepared to sell stakes in other businesses in the future.He also noted that Egypt anticipates a rise in its annual inflow of hard cash of $70 billion per year to $191 billion by 2026.
According to Said, the government anticipates completing a $300 million transaction for the Gabal El Zeit wind farm as well as sales of the military-owned Wataniya Petroleum and a Siemens power plant in the coming months.