Pundits are closely following news that suggests there could be fresh energy in the privatization program as the Madbouly government looks to bring in some USD 5 bn in proceeds this fiscal year. The latest news sees potential sales of stakes in two high-profile telecoms players as well as a renewable energy facility. The expectation is that all three sales will be paid for with inflows of foreign exchange.

#1- Gov’t to sell down a further stake in Telecom Egypt? The Madbouly government is considering divesting another 10% of Telecom Egypt (TE) to investors, a government source told Enterprise. The sale is expected to happen before the end of the year, the source said. The official was speaking after Al Borsa reported that the Finance Ministry is considering selling an additional 10-15% stake in the firm.

Remember: The government sold a 10% stake in the company via the EGX in May, reducing its stake to 70%. The remaining shares in TE are in free float. The sale was the first to take place since the government rebooted its privatization program in February, outlining plans to sell stakes in 32 state-owned companies.

We had a hint this was coming: Telecom Egypt was among three companies added to the privatization program last month, following the initial 10% stake sale. The government is now aiming to draw USD 5 bn in investment through the privatization of state-owned companies and assets in the nine months between October 2023 and June 2024. You can check out the official update on the privatization program here.

More than 90% of the 10% stake were bought by local investors paying in EGP. This meant the sale generated less than USD 11 mn in hard-currency proceeds.

Remember: As part of its USD 3 bn assistance program with the IMF, Egypt earlier this year rebooted its long-stalled privatization program in a bid to attract FX inflows and shore up its external position. The government is now looking to raise USD 5 bn by next June when the current fiscal year ends by selling stakes in 35 companies.

QATAR-VODAFONE EGYPT TALKS ARE ONGOING-

#2- QIA close to snapping up TE’s stake in Vodafone Egypt? The Qatar Investment Authority (QIA) could wrap up by the end of September talks to acquire a portion of Telecom Egypt’s 45% stake in Vodafone Egypt, according toAl Borsa.

Hold your horses: A source in the telecom sector we talked to yesterday declined to put a timeline on the transaction.

Stake size remains the sticking point: TE isn’t willing to part with more than 30% of its stake in Vodafone Egypt, our source said. The two sides have reportedly been going back and forth for at least a year on the size of the sale, with QIA seeking a larger stake. The remaining 55% stake in Vodafone Egypt is held by South Africa’s Vodacom.

Are other suitors out of the picture? Last we heard, Saudi wealth fund PIF was said to be competing with QIA for a stake in Vodafone Egypt.

GABAL EL ZEIT UPDATE-

Five investors interested in wind farm: The government has received five offers from investors interested in acquiring the 580-MW Gabal El Zeit wind farm, Planning Minister Hala El Said told Bloomberg yesterday, without disclosing the names of the would-be investors.

An ultimatum? The government has given an “international investor” two months to take a decision on whether to go ahead with the purchase, the minister said, again, without naming names.

That international investor is most likely Actis: We have it on good authority that the emerging markets-focused private-equity outfit Actis has made an initial offer for the wind farm and is the government’s preferred bidder.

A potential sticking point? The government wants the buyer to up its bid to USD 600-800 mn from USD 400 mn, a source the New Renewable Energy Authority told us last month.

Deal when? El Said told the news outlet that she expects the sale to be wrapped up by October or November.

ALSO KEEP YOUR EYE ON: The ongoing sales of stakes in military-owned companies including filling station manager Wataniya and bottled water maker Safi.

Tags: