{"id":588785,"date":"2023-06-16T00:00:00","date_gmt":"2023-06-16T00:00:00","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2023\/06\/16\/it-was-an-eventful-week-on-the-privatization-front-cbe-has-a-decision-to-make-next-week\/"},"modified":"2023-06-16T00:00:00","modified_gmt":"2023-06-16T00:00:00","slug":"it-was-an-eventful-week-on-the-privatization-front-cbe-has-a-decision-to-make-next-week","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2023\/06\/16\/it-was-an-eventful-week-on-the-privatization-front-cbe-has-a-decision-to-make-next-week\/","title":{"rendered":"It was an eventful week on the privatization front + CBE has a decision to make next week"},"content":{"rendered":"

Good morning, everyone, and happy FRIDAY. <\/span>We\u2019re edging ever closer to the much-needed Eid break at the end of the month, but before then \u2014 we have to get through the final full workweek of June. Hang in there, folks. <\/span><\/p>\n

If you have some extra free time on your hands and are in need of a new hobby, how about dabbling with some urban farming? <\/span>Our Enterprise Guide for the week has everything you need to know before building an edible urban garden in your home. Give it a read below. <\/span><\/p>\n

Enterprise Weekend comes out each Friday at 9:00am CLT.<\/span> We\u2019ll be back on Sunday at 6am with EnterpriseAM. Until then: Enjoy the weekend.<\/span><\/p>\n

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The Enterprise Finance Forum is our flagship gathering \u2014 the one so many of you have <\/span>been waiting for. <\/span>The two-day event takes place this September and will be the latest in our must-attend series of invitation-only, C-suite-level gatherings. <\/span><\/p>\n

TAP OR CLICK <\/span>HERE<\/a><\/span> if you want to express interest in attending. <\/span>We\u2019ll be sending out the first batch of invitations just after the 30 June holiday. <\/span><\/p>\n

Do you want to become a commercial partner? <\/span>Please click <\/span>here<\/a><\/span>.<\/span><\/p>\n

STAY TUNED for more detail <\/span>about our location, speakers, and exciting agenda in the weeks to come. <\/span><\/p>\n

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<\/span> LAST WEEK IN 3 MINS- Interest in the privatization program is getting red <\/span>hot: <\/span>While the week started with some red hot inflation figures, the main running theme turned out to be the incredible interest we\u2019re seeing in the privatization program, from both the private sector and our friends in the GCC. <\/span><\/p>\n

PRIVATIZATION WATCH-<\/span><\/p>\n

#1-<\/span>Private equity giant <\/span>Actis<\/a><\/span> and Malaysian power company <\/span>Edra<\/a><\/span> are looking to acquire a 4.8 GW Siemens power plant <\/span>in a transaction that could be worth <\/span>some USD 2 bn<\/a><\/span>. The two potential bidders plan to submit offers to acquire as much as 100% of the plant and operate it.<\/span><\/p>\n

#2- Misr Pharma and CID are up for grabs:<\/span> Several investors are in talks with the Public Enterprises Ministry <\/span>to acquire stakes<\/a><\/span> in state-owned pharma company Chemical Industries Development (CID) through a capital increase and HoldiPharma subsidiary Misr Pharma. <\/span><\/p>\n

#3- Calling banks for Alexbank sale advisory:<\/span>The Finance Ministry <\/span>invited local and international banks<\/a><\/span> to pitch for an advisory role on the sale of its 20% stake in Bank of Alexandria (Alexbank). <\/span><\/p>\n

More banking sales to come? <\/span>The House of Representatives <\/span>approved<\/a><\/span>on Tuesday a government-proposed bill that will revoke the establishment laws of the Arab Investment Bank (aiBank), the Export Development Bank (EBank), and the Agricultural Bank of Egypt. While the law is an attempt to reform the regulatory framework of those banks and bring them in line with current legislation, the move could be a harbinger of a potential stake sale of those banks, banking sources tell us. <\/span><\/p>\n

#4-<\/span>SCZone is on course to IPO 20% of Port Said terminal operator on the EGX:<\/span> The Suez Canal Economic Zone\u2019s (SCZone) board of directors <\/span>agreed to sell<\/a><\/span> a 20% stake in Port Said Container and Cargo Handling (PSCCHC) in an IPO on the EGX. The SCZone currently holds a 39% stake in PSCCHC, while the Holding Company for Maritime Transport owns 40%.<\/span><\/p>\n

MORE GCC INTEREST IN THE PRIVATIZATION PROGRAM- <\/span><\/p>\n

#1- Abu Dhabi wealth fund ADQ is eyeing a 20-25% stake in state-owned Egyptian Chemical Industries (Kima)<\/span>. The <\/span>stake sale<\/a><\/span> is reportedly one of the financing options on the table for the second phase of Kima 2, the company\u2019s nitric acid and ammonium nitrate plant in Aswan which is estimated to cost some USD 297 mn.<\/span><\/p>\n

#2- Qatar could be looking to invest in Egypt\u2019s hospitality sector:<\/span> The Qatar Investment Authority (QIA) is considering acquiring a minority stake in seven hotels in Egypt, potentially through a stake in the planned hotel holding company that the government said it plans to establish by<\/span>bundling seven of its five-star properties<\/a><\/span>. The Qatari sovereign wealth fund is in negotiations with the Sovereign Fund of Egypt (SFE) and is looking to acquire up to 30% of the hotels, the people said.<\/span><\/p>\n

#3- SEII is close to acquiring 70% of state-owned El Nasr Glass and Crystal: <\/span>Saudi Egyptian Industrial Investment (SEII) could \u201cwithin weeks\u201d finalize <\/span>an agreement<\/a><\/span> with the state-owned Metallurgical Industries Holding Company (MIH) to acquire 70% of its subsidiary El Nasr Glass and Crystal Company through a capital increase.<\/span><\/p>\n

M&A + INVESTMENT WATCH-<\/span><\/p>\n

The Greek Campus<\/a><\/span> and coworking space provider <\/span>MQR<\/a><\/span> entered into a <\/span>definitive merger agreement<\/a><\/span>, creating what they say is the MENA region\u2019s largest community of entrepreneurs. <\/span><\/p>\n

Meanwhile, Swiss pharma giant <\/span>Roche<\/span> and local meds firm<\/span> Eva Pharma<\/span>agreed to<\/a><\/span>localize<\/a><\/span> the production of <\/span>immunosuppressant medications<\/span> for organ transplant patients, with the possibility of exporting to markets in Africa. <\/span><\/p>\n

The <\/span>Suez Canal Economic Zone<\/span> also <\/span>approved<\/a><\/span> several new projects<\/span>, including a USD 610 mn steel complex, a USD 300 mn Chinese ironworks, a ready-made garments factory, and a EUR 750 mn tire manufacturing plant.<\/span><\/p>\n

ON THE MACRO FRONT- <\/span><\/p>\n

Inflation accelerated once again in May<\/span>: Annual urban inflation <\/span>rose to 32.7% y-o-y in May<\/a><\/span> from 30.6% the month before on the back of accelerating food and beverage prices. Inflation is now once again at its highest since July 2017, when it hit an all-time high of nearly 33%.<\/span><\/p>\n

LEGISLATION WATCH-<\/span><\/p>\n

#1- Budget greenlit by MPs:<\/span> Parliament gave the final go ahead to the FY 2023-2024 budget and socioeconomic development plan<\/span>after just two days of debate with majority parties Mostaqbal Watan and Protectors of the Nation (Homat El Watan) both <\/span>voting in favor<\/a><\/span> of the bill. Dissenting MPs voiced concerns over excessive borrowing included in the plan, the government\u2019s handling of the current economic crisis and insufficient healthcare and education spending allocations. The budget is now on its way to President Abdel Fattah El Sisi to ratify.<\/span><\/p>\n

WHAT\u2019S HAPPENING NEXT WEEK-<\/span><\/p>\n

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<\/span>Expect an important agreement between the IFC and the Madbouly cabinet on Sunday on the private sector: <\/span>IFC Managing Director Makhtar Diop will be in town on Sunday to meet with several government officials, including Prime Minister Moustafa Madbouly, and sign agreements to \u201cmobilize the private sector in Egypt,\u201d according to an emailed <\/span>statement<\/a><\/span>. <\/span><\/p>\n

REMEMBER- The IFC is interested in playing a role in the state privatization program: <\/span>International Finance Corporation (IFC) Regional VP for Africa S\u00e9rgio Pimenta was in town in March for talks with the government on how best the IFC can participate in the program. In an <\/span>exclusive interview<\/a><\/span> with Enterprise, Pimenta detailed the many ways the IFC can help, including as an adviser as well potentially providing financing for investors. The IFC has been actively encouraging investors to take part, he tells us, adding that he believes it will pave the way for FDI.<\/span><\/p>\n

<\/span>It\u2019s interest rate week: <\/span>The Central Bank of Egypt\u2019s Monetary Policy Committee meeting is on <\/span>Thursday, 22 June. May\u2019s <\/span>hot inflation reading<\/a><\/span> triggered concerns among analysts speaking to Reuters that it could put pressure on the CBE to raise interest rates during its next meeting. The CBE\u2019s monetary policy committee <\/span>left rates unchanged<\/a><\/span> at its last meeting in May, saying it would continue to assess the impact of the 1k-bps worth of rate hikes implemented in the past 15 months. That said, analysts including Bloomberg chief EM economist Ziad Daoud have suggested we won\u2019t see movement on rates unless and until the currency depreciates further.<\/span><\/p>\n

President Abdel Fattah El Sisi will <\/span>reportedly join<\/a><\/span> a group of African heads of state traveling to Kyiv<\/span> to meet with Ukrainian President Volodymyr Zelenskyy for <\/span>peace talks<\/a><\/span> on Friday. The group will fly to Moscow the next day for further talks with Russian president Vladimir Putin, the FT says.<\/span><\/p>\n

OTHER EVENTS WORTH NOTING- <\/span><\/p>\n

The Senate reconvenes on Sunday, 18 June, and The House reconvenes on Tuesday, 20 June <\/span>after taking a week-long break.<\/span><\/p>\n

The <\/span>Egypt Infrastructure and Water Expo<\/a><\/span> will run starting from Monday 19 June<\/span> through Wednesday 21 June at the Egypt International Exhibition Center.<\/span><\/p>\n

The <\/span>Big 5 Construct<\/a><\/span> will also run Monday through Wednesday<\/span> at the Egypt International Exhibition Center.<\/span><\/p>\n

The <\/span>Capital Markets Annual Summit<\/a><\/span> is on Tuesday, 20 June <\/span>at the Nile Ritz-Carlton. Government IPO\u2019s and the state\u2019s privatization drive are expected to be on the agenda. <\/span><\/p>\n

Check out our full calendar on the web<\/a><\/span> for a comprehensive listing of upcoming news events, national holidays and news triggers.<\/span><\/p>\n

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