Big privatization news incoming? Prime Minister Moustafa Madbouly will take to the small screen later today, holding a press conference at 2pm CLT to discuss recent developments in the state asset sale program — and to give us a look at what could come next.

Watch this space: Madbouly will speak after the inking of an “important” privatization sale agreement, a government spokesperson said in a message to media.

Could we also see the program expanded? Ministers are talking with the IFC about adding new sectors to the program, the prime minister said during his meeting yesterday with IFC Africa chief Sérgio Pimenta. This echoes recent statements from Sovereign Fund of Egypt CEO Ayman Soliman, who told the media that the program will expand to include infrastructure and financial services companies. Pimenta pointed to the companies in the infrastructure, agriculture, and banking sectors.

Temper your expectations: Yes, we all want things to move faster. Cabinet does, too. And yes, there are signs of healthy investor interest in the program. But it is ultimately not going to hit “escape velocity” until after the float (or devaluation) of the EGP to a market-clearing rate.

WHAT CAN WE EXPECT?

#1- Sale of historic hotels? A group consisting of Talaat Moustafa Group subsidiary Icon Investments and unnamed foreign investors could be upping its stake in a group of historic hotels, with an announcement to be made during today’s press conference, sources reportedly told Asharq Business. Icon led a group of investors who took in July took a 37% stake in a USD 700 mn transaction and unconfirmed reports earlier this year claimed that the consortium was looking to get a controlling stake of at least 51%.

Night-time talkshow queen Lamees El Hadidi also thinks the TMG-led group will get to 51% and called last night for more transparency about the IFC’s role in the program (watch, runtime: 5:07)

We’ve been waiting for this: Earlier this month, Planning Minister Hala El Said said that the government plans to complete the stake sale before the end of the year.

#2- ADQ acquisitions finalized? Abu Dhabi’s sovereign wealth fund ADQ has been working to close a USD 800 mn acquisition of stakes in the three oil and petrochemical companies — a 35% stake in Egyptian Linear Alkyl Benzene (Elab), 30% of Egyptian Ethylene and Derivatives Company (Ethydco), and 25% of the Egyptian Drilling Company (EDC) — for some time now. The sale has been announced pending finalization since July. The SFE’s Soliman had previously said that the transaction is expected to wrap up before the end of the year. The government had initially hoped to sign the final contracts by the end of September.

#3- News on state-owned lenders earmarked for privatization: The government was at one time looking to make its long-awaited exit from Banque du Caire and United Bank before the new year. The European Bank for Reconstruction and Development has expressed interest in taking positions in both banks. Last month, the Central Bank of Egypt (CBE) and Kuwait Investment Authority (KIA) were said to have agreed to offload a 20% stake each in AAIB next year.

What about Banque du Caire’s IPO? We think it unlikely to happen given current market conditions — there are simply too few institutional investors with interest in public equities right now. But EBRD wouldn’t be looking to take 100% of the bank; it’s more likely to take a minority stake and work with the bank to create new value ahead of an exit during a later IPO or sale to a strategic.

#4- Wind farm sales: The sale of stakes in the state-owned 580-MW Gabal El Zeit and 545-MW Zafarana wind farms are expected to wrap up in 1Q 2024. The SFE earlier this month appointed Belgium-headquartered engineering and consultancy firm Tractebel to act as a consultant for the sales.

#5- The Siemens power plants: The government is looking to sell a c. 70% stake in the at least the 4.8-GW Beni Suef combined-cycle power plant, which privatization program documents released earlier this year assigned an “indicative” value of USD 1.4-1.9 bn.

WHAT WE KNOW

#1- 35 companies: There are 35 companies and assets currently on the privatization list, after the state expanded on the original list of 32 companies in August.

#2- A USD 5 bn target: The government is aiming to raise USD 5 bn from the offering program between October 2023 and June 2024.

#3- What it has already sold: Stakes in companies including Eastern Co., Telecom Egypt, Pachin, and Al Ezz Dekheila.

WHAT WE WANT TO KNOW

#1- Safi + Wataniya sale? The government has been working on selling off the military-owned filling station operator Wataniya and bottle water firm Safi for three years now, but the sales keep getting delayed. Most recently, the Wataniya stake sale was pushed back to 2024, meanwhile the last we heard on Safi was in August, when the government said that it was aiming to wrap a sale by year’s end.

#2- 35 becomes 36? El Said recently said that the government is looking to offload a stake in the military’s Chill Out fuel retailer without elaborating on if it will join the privatization program or not.

IFC INVOLVEMENT?

Could the IFC be on hand for the press conference? The presser is scheduled hot on the heels of Pimenta’s privatization-centered meeting with Madbouly that came during his three-day visit to Cairo. The IFC was named a strategic advisor to the state asset sale program earlier this year. It’s unclear whether Pimenta will attend today’s presser — by our math, his visit to Cairo was due to wrap up yesterday.

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