Privatization was back in the news cycle yesterday after two unconfirmed reports in the domestic press suggested the government is making progress in its quest to sell stakes in two of the three banks included in its privatization program.

INTEREST IN UNITED BANK-

Mashreq Bank Egypt, Credit Agricole Egypt, and the National Bank of Kuwait’s Egypt unit have begun due diligence on United Ban k with a view to potentially acquiring a stake in the CBE-owned lender, As harq Busin ess reports, citing a source it says has knowledge of the planned sale. A second source is reported as confirming that three lenders have begun due diligence, without naming them.

Folks are mum on this one: Multiple sources we reached out to yesterday declined to comment on the report.

Remember: United Bank is one of the three lenders among the 32 state companies and assetsthat the government plans to sell stakes in as part of its privatization program. The CBE in May appointed Barclays to join CI Capital as an advisor on the sale, and the duo were reportedly planning a promotional roadshow in June targeting Kuwait, Qatar, Oman, and the UAE.

It’s unclear whether PIF is still in the running: The CBE — which owns 99.99% of United Bank — was negotiating to sell the lender to Saudi Arabia’s sovereign wealth fund PIF before talks stalled in February, apparently due to a dispute over valuation amid uncertainty over the exchange rate.

BDC IPO THIS YEAR?

Could Banque du Caire’s long-awaited IPO go ahead in 4Q 2023? The government is planning to offer a 49% stake in state-owned lender Banque du Caire (BdC) via the EGX in 4Q 2023, Al Borsa reported yesterday, citing unnamed sources it says are close to the transaction. Shares are set to be offered to both institutional and retail investors, the sources are quoted as saying.

Gauging demand: The state is reportedly waiting to see the results of the roadshow to promote the sale of United Bank — the second of three financial institutions in the government’s privatization program — before it moves forward with the BdC transaction.

CI Capital on board? The government is looking into bringing CI Capital in on the transaction as an advisor alongside EFG Hermes, according to the newspaper.

Still more no comments: Sources with first-hand knowledge of the potential BdC transaction declined to comment when we reached out to them yesterday.

It’s been a long time coming: The state has been planning to sell a stake in BdC since 2016 but has delayed the IPO multiple times due to poor market conditions. The bank was among three financial institutions earmarked for sale in the government’s privatization strategy unveiled earlier this year.

BdC may need to renew its IPO approval: It’s not clear if the bank will need to reapply to the Financial Regulatory Authority (FRA) for listing approval since its most recent deadline expired on 31 March of this year. That approval is largely a procedural matter that wouldn’t slow down the transaction if it were indeed to go ahead this year.

Tags: