It looks like privatization via IPO could become an increasingly important part of the government’s privatization push, with Prime Minister Mostafa Madbouly telling reporters that a plan to offer three to four companies affiliated with the military on the bourse, in his weekly presser yesterday.

We should know more next week with the release of the government’s privatization plan for the coming period, Madbouly said. The prime minister name-checked the banking, industry, and pharma manufacturing as among the sectors where companies earmarked for privatization will be announced.

It’s little coincidence — at least in our opinion — that the news follows United Bank’s heavily oversubscribed offerings that wrapped earlier this week. While direct stake sales have their advantages, the process can often be slow and prone to hurdles that derail negotiations — which can understandably make the prospect of an IPO tempting.

There certainly seems to be investor interest on the EGX for fresh offerings from the state, as the Central Bank of Egypt-owned United Bank saw its retail tranche oversubscribed 59x and its private placement covered 6x. The offerings raised EGP 4.57 bn and has signaled an important milestone in the government’s privatization programme.

Foreign investments are also in the works, with Madbouly saying that foreign companies — both new to the market and veterans — are getting ready to launch projects, including in the automotive and renewable energy industries. “Positive news” on these investments will continue to roll out once the agreements are finalized, Madbouly said.

The international press also picked up the story: Bloomberg.

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