Egypt mulls selling 3 companies owned by the army

157

The Egyptian regime is considering selling three companies owned by the military in 2021, Bloomberg reported on Monday. The agency considered that the potential step is a historic opening of part of the economy to much-needed private investment.

Bloomberg quoted the chief executive of Egypt’s sovereign wealth fund, Ayman Suleiman, as saying that studies are underway on more assets to offer. Suleiman had said last week that up to 100 per cent of stakes in a mineral water company and a petroleum company would be offered in the first quarter.

Suleiman did not specify the three potential companies but said the initial plan was to sell as much of the full ownership as the ten companies owned by the Defence Ministry’s National Service Projects Authority.

The fund assists the National Service Projects Organisation in selecting assets and promoting them to investors, and possibly participating in investing in them by taking minority stakes. The National Service Projects Organisation was established in Egypt in 1979 and owns more than 30 companies in various sectors, from building materials and food to mining and petrochemicals. According to Suleiman, the Cairo-based investment bank EFG Hermes provides advice to the fund on the initiative.

These steps come at a time when the largest country in the Arab world in terms of population is focusing on attracting private investment, which the International Monetary Fund says is something that has previously been hindered by competition from some Egyptian state institutions. In a separate interview with Bloomberg, Egyptian Planning Minister Hala al-Saeed considered selling companies affiliated with the military as a historic shift in how the Egyptian economy was structured.

The minister described the move as the first opportunity for local and foreign investors to fully own the army’s companies. The selected NSPO companies will be offered first to private investors and can then be listed on the Egyptian Stock Exchange.