Egypt Divests $121.6 Million Stake in State-Owned Telecom Egypt

In a statement on Sunday, Egypt’s finance ministry announced the successful sale of a 9.5% stake in state-controlled Telecom Egypt for 3.75 billion Egyptian pounds ($121.6 million). This move injects new energy into a privatisation programme that appeared to have hit a standstill.

Egypt is in urgent need of funds from privatization in order to fulfill several foreign debt obligations in the coming months.

Telecom Egypt’s sale of state assets marks the second milestone in Prime Minister Mostafa Madbouly’s commitment to advancing the sales programme. He aims to sell assets worth $2 billion by the end of June, highlighting the government’s dedication to economic reform.

Under a $3 billion, 46-month financial support package signed in December, Egypt promised the International Monetary Fund it would roll back the state’s involvement in the economy and allow private companies a much greater role.

The stock exchange said on Sunday the sale of 162.2 million shares of Telecom Egypt had been executed for a total 3.75 billion pounds.

The finance ministry said the shares were sold at 23.11 pounds each in a subscription that was 3.11 times oversubscribed. Another 0.5% of the shares are now being offered to Telecom Egypt employees until May 25.

The two-part sale will reduce the government’s stake in Telecom Egypt to 70% from the previous 80%, with the other 20% floating on the Egyptian Exchange. Two local investment banks, CI Capital and Ahly Pharos, were managing the sale, according to market sources.

The ministry statement did not say what portion of the shares were sold to local buyers as opposed to non-Egyptians. Egypt has been looking to raise foreign currency through its asset sales.

Al Mal newspaper said on Thursday that Moon Capital, based in New York, was among the bidders.

(Reuters)