Abu Qir Fertilizers + Sidpec to join the privatization list? The Madbouly government is reportedly considering selling secondary stakes in state-owned, EGX-listed companies Abu Qir Fertilizers and Sidi Kerir Petrochemicals (Sidpec),Al Mal reports, citing unnamed sources it says are in the know. There is no publicly available information about the size of the possible transactions, the timeline, or who is advising.

Promising murmurs: Officials are currently re-evaluating Abu Qir’s market value in light of a positive 1Q 2023 performance and the depreciation of the EGP, a government official told Enterprise yesterday on condition of anonymity.

Strong 1Q performance could help: Both companies reported that their net incomes more than doubled in 1Q supported by strong revenue growth. Abu Qir revenues increased 80% y-o-y to EGP 6.4 bn during the quarter while Sidpec’s top line grew almost 70% to EGP 8.7 bn.

Market reax: Abu Qir’s shares fell 4.7% to close at EGP 47.37 apiece on Monday, whileSidpec’s shares lost 1.5% to close at EGP 22.16. The benchmark EGX30 was down 2.0% yesterday, leaving the market up nearly 19% since 1 January.

An easier sell? The fact that the two firms are already listed on the EGX as well as investors’ interest in the petrochemical and fertilizer sectors could make their inclusion in the government’s privatization program more likely, Al Mal’s sources are quoted as saying.

Gulf investors already own significant minority stakes in Abu Qir: The Saudi and Emiratiwealth funds together acquired more than 40% of the state-owned company last year. The purchases were part of a broader acquisition drive which saw the funds spend USD 3.1 bn to buy government-owned shares of EGX listed companies. Some 30.5% of the company is still held (pdf) by state-owned entities, a 5.0% stake is held by the Abu Qir workers’ union, and the remainder (c.23%) is in freefloat.

And they could be eyeing Sidpec post its merger with Ethydco:An unconfirmed report inFebruary suggested that Gulf investors could look to acquire between 16-20% of the company that will be formed by the ongoing merger between Sidpec and Egyptian Ethylene and Derivatives Company (Ethydco). Ethydco was among the 32 companies named on the privatization list.

Gov’t wants to raise USD 2 bn from asset sales by June: Prime Minister Moustafa Madbouly last week said the government is aiming to raise up USD 2 bn from asset sales by June. The PM was speaking a few days after S&P Global Ratings became the latest to warn that stalling reform efforts are raising the likelihood that the country slides into default.

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