It’s a wrap on the Eastern stake sale: The Madbouly government has completed the sale of a 30% stake in state-owned tobacco manufacturer Eastern Company for USD 625 mn, making it the single-largest transaction since it rebooted its privatization strategy earlier this year.

New Emirati shareholders: The UAE-based Global Investment Holding (GIH) purchased 669 mn shares from the company’s state-owned majority shareholder for EGP 24.52 apiece, totaling EGP 16.4 bn (USD 532 mn), the Public Enterprises Ministry said in a statement (pdf) Thursday. The transaction will make GIH the company’s single-largest shareholder.

A top-up: GIH agreed to pay an additional EGP 4.38 per share, taking the total value of the transaction to EGP 19.3 bn (USD 625 mn), according to the statement. The ministry did not disclose which state coffer will be the ultimate beneficiary of the funds.

GIH bought the shares in USD and settled the transaction the day before it closed. The money will be transferred from abroad under the agreement.

USD > EGP: The state offering program is a key part of the government’s strategy to bring an end to the 18+ month FX shortage. The government has so far had mixed results in selling assets for hard currency, with stake sales to ADQ recently bringing in USD 800 mn but sales of shares in both Telecom Egypt and Al Ezz Dekheila shares being done primarily in EGP.

The state no longer has a controlling interest in the firm: State-owned Chemical Industries Holding Company’s (CIHC), the former majority shareholder of Eastern, sold the entire 30% stake, reducing its ownership to 20.95%. The Allan Gray Africa ex-SA equity fund owns another 7.21% stake in the company while the labor union holds a 5.2% share. The remaining shares are in freefloat.

Market reax: Eastern Company shares rose 0.9% to close at EGP 27.95 on Thursday.

Remember: The government announced in September that the Emirati firm had agreed to purchase the stake for USD 625 mn in addition to a USD 150 mn investment to help it overcome the economic headwinds and purchase manufacturing inputs.

Eastern could be facing an antitrust probe:Tobacco distributors JTI-Nakhla and Al Mansour International Distribution Company last week filed a complaint with the Egyptian Competition Authority (ECA) accusing Eastern and GIH of engaging in monopolistic practices. The ECA has yet to publicly say it has received the complaint and has not confirmed it is starting an investigation.

What’s next for the privatization program: Cabinet is expecting to finalize agreements to sell a significant stake in its hotels holding company and military-owned fuel retailer Wataniya.

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