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TE stake sale to start this week? Government plans to sell a minority stake in Telecom Egypt (TE) to investors look to be back on the table, with Bloomberg reporting yesterday that it could begin the process of selling a 10% stake in the state-owned telecom giant as soon as this week. TE’s advisors could start inviting bids from institutional investors for the shares, which would be listed on the EGX, people familiar with the matter reportedly told the news outlet.
Selling at a discount: The government will be selling shares at EGP 22.25 apiece, a 3.8% discount from TE’s current share price of EGP 23.14. The transaction would be worth around EGP 3.8 bn (c. USD 122.8 mn) at that price.
The sale has been in the cards since March: The Finance Ministry unveiled its plans to sell shares in the company in March. Reuters reported earlier in the month that the government is looking to sell 10% of the company, a figure which has yet to be publicly confirmed by any of the parties involved. Rumors that the sale had been postponed then surfaced in the press, which claimed that officials had put plans on hold due to the global banking crisis.
The delay has proven costly: TE’s shares have fallen 16% since the initial Reuters report on 6 March. The reported offer price is a 20% discount to its share price in early March.
Current ownership: The state currently owns 80% of TE, while the remaining 20% is in freefloat.
June is fast approaching: The government wants to raise some USD 2 bn from asset sales by June. Since announcing the privatization program in February, the state has sold its stake in just one company, raising USD 25 mn from its sale of EGX-listed Paint and Chemical Industries (Pachin) to Emirati firm National Paints Holding. Prime Minister Moustafa Madbouly said this week that the government is working on a number of transactions and would announce the details soon.
Advisors: Our friends at CI Capital are reportedly managing the transaction alongside Al Ahly Pharos, while NBE is also said to be involved as an advisor.
ALSO IN PRIVATIZATION-
NPH is officially Pachin’s majority shareholder: Some 19.36 mn shares in EGX-listed Paint and Chemical Industries (Pachin) were transferred to Dubai-based National Paints Holding (NPH) yesterday, per anEGX bulletin, completing NPH’s EGP 770.5 mn acquisition of more than 80% of the company.
