EDC + Elab being lined up for stake sales: The Egyptian government is in talks with strategic investors to sell a 49% stake in the Egyptian Drilling Company (EDC), CNN Arabic reported yesterday, citing an anonymous Egyptian government source. Negotiations with the strategics, the majority of which are Emirati, have already kicked off, the source said, adding that the government is aiming to complete the sale before the end of 3Q 2023. The government will retain a 51% stake in the company following the transaction.

Elab heading for the EGX? Egyptian Linear Alkyl Benzene (Elab) will be listed on the EGX this month, CNN’s source said. The government is reportedly seeking to sell more than 40% stake in the company via a public share sale on the EGX and private offerings to strategic investors, according to the report. It is unknown how much of the company would be allocated to strategics.

This would make sense: Elab was namedas the first company to go to market via the Sovereign Fund of Egypt’s (SFE) pre-IPO fund, fund head Ayman Soliman told local media in March, without disclosing any further details about the sale.

Oil and petrochemical companies dominated the government’s list of 32 state-owned companies that would be offered to investors under its rebooted privatization plans. Both EDC and Elab were namedwhen the list was released in February, although it wasn’t clear at the time which companies would be destined for the EGX and which were being earmarked for strategics. The government aims to raise USD 2 bn via asset sales by the end of June, and has so far raised some USD 147 mn by selling off Pachinand a 10% stake in Telecom Egypt.

Time is of the essence: The slow rate of progress in selling off state assets is increasing pressure on the country’s external position, raising concerns about the government’s ability to meet foreign debt repayments. The privatization program — a key component of the USD 3 bn IMF program — is key to ending the prolonged FX shortage and stabilizing the currency.

NI Capital expects two sales this month: Two of the seven state asset sales being worked on by NI Capital are expected to be completed before the end of June, CEO Mohamed Metwally previously told CNBC Arabic. Metwally declined to disclose names but said that it is working on selling shares in state-owned companies in the oil, petrochemicals and transport sectors.

AAIB REPORTS FINANCIALS-

One of the three banks up for privatization just reported its 1Q financials: The Arab African International Bank (AAIB) saw its profits increase 22% y-o-y in 1Q 2023 to reach EGP 1.22 bn, according to the bank’s standalone financial statements picked up by Al Borsa. AAIB – whose ownership is evenly split between the Central Bank of Egypt and the Kuwaiti sovereign wealth fund – is one of the three banks named on the government’s privatization list alongside United Bank and Banque du Caire,

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