It’s official: TE stake sold. Egypt has got its privatization program up and running with the sale of a 9.5% stake in Telecom Egypt to institutional investors, the parties involved with the offering confirmed yesterday. The government raised nearly EGP 3.75 bn (USD 121.3 mn) after selling 162.2 mn shares in the state-owned telco for EGP 23.11 a piece — TE’s closing share price on Thursday, the EGX and the Finance Ministry said.

This is the first sale under the privatization program launched in February, under which the government aims to sell stakes in 32 companies by March 2024.

Demand was stronger than initially reported: The Finance Ministry’s accelerated bookbuilding process saw the secondary share sale covered 3.1x, it said in the statement.

We still don’t know who bought in: The government is yet to reveal which institutions purchased shares in the company. CI Capital — which acted as joint financial advisor and bookrunner on the transaction — said (pdf) that “international, regional, and domestic institutional and high-net-worth investors” subscribed, without disclosing further details.

Who bought in is important: Getting foreign investors on board with the privatization program is key if the government is going to use asset sales to address our acute shortage of FX. Selling to locals in EGP is fine if all you’re trying to do is get the state out of the economy, but does little to bring in fresh inflows of hard currency.

Now it’s TE employees’ turn: TE’s employees have until the end of the working day on 25 May to subscribe to the remaining 0.5% of the company (8.5 mn shares) earmarked for them in the second stage of the transaction. If the employee tranche is undersubscribed, the government has the option to sell any remaining shares to investors. Share transfers to employees will be executed by 1 June.

Advisors:Al Ahly Pharos andCI Capital acted as joint financial advisors and bookrunners alongside NI Capital, according to an FRA statement (pdf). Adsero Ragy & Partners were legal advisors to TE, while Zulficar & Partners acted as legal advisor on the transaction.

REMEMBER- The government aims to raise USD 2 bn via asset sales by the end of June. Together with the sale of Pachin to Dubai-based National Paints Holding, it has now reached some 7% (USD 147 mn) of that target.

ADQ IN FOR SAFI?

ADQ’s Agthia makes a bid for Safi: ADQ-owned Emirati F&B company Agthia is among several bidders for military-owned bottled drinks firm Safi, a source close to the transaction confirmed to Enterprise after the news was first reported by Al Borsa. The Madbouly cabinet last week said that both Safi and military-owned fuel retailer Wataniya would start receiving offers from strategic investors this month. The government has reportedly tapped CI Capital to market stakes of at least 10% in each firm to strategics.

Agthia isn’t new to our market: The company last year bought a 60% stake in Egyptian food company Auf Group, and in 2021 acquired 75% of Atyab brand owner Ismailia Agricultural and Industrial Investments.

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