The government has signed agreements worth USD 1.9 bn to sell state-owned assets under its privatization program. The state has raised USD 1.65 bn through the stake sales and received the remainder in EGP. 

ADQ acquired 25-30% stakes in Egyptian Ethylene and Derivatives Company (Ethydco), Egyptian Linear Alkyl Benzene (Elab), and Egyptian Drilling Company (EDC) for USD 800 mn. 

TMGH’s subsidiary Icon Investments together with Emirati investors invested USD 700 mn in a government holding company for hotels via a capital increase, acquiring a 37% stake. 

The government divested its entire 31% stake in IRAX to ESRS, for USD 241 mn. 
 
The government will soon announce additional transactions worth another USD 1 bn. 

The International Finance Corporation was assigned to assist in the offering program and to increase the number of targeted companies to 50 companies, instead of the current 32 companies. 

The government is looking to secure some USD 3 bn in financing from bond issuances through the end of the year.

Egypt’s budget deficit widened to 6.2% of GDP in FY 22/23, up from 6.1% a year before. The primary surplus of 1.6% of GDP, up from 1.3% in FY21/22. 

The Sovereign Fund of Egypt agreed to sell the Jabal Al-Zeit wind station, for more than USD300 million, after receiving a set of non-binding offers. Due diligence is undergoing. 

A stake in the Siemens Power Station in Beni Suef is scheduled to be sold in 1Q24. 

Projects have been put forward to establish 21 water desalination plants with investments of USD 3 billion by the end of 2024. 

“Wataniya” stake sale will be awarded between October and November.
  
A large number of companies affiliated with the petroleum sector are being groomed to join the government privatization program during the coming period. 

TMGH's (FV: EGP19.67, OW) hospitality arm, Arab Company for Tourism and Hotels Investments, known as ICON (82% owned by TMGH), submitted an offer to acquire a significant stake with management rights in the portfolio of seven hotels. The acquisition will bring ICON’s hotel portfolio to a total of 15 hotels and increase its room number to around 5,000 rooms, inclusive of projects under development and construction. The acquisition will contribute to future revenues earned in hard currencies and will increase TMGH’s recurring income. 

OCDI (FV: EGP23.30, OW) signed a revenue share co-development agreement on two adjacent land plots totaling 440 feddans on the North Coast, whereby OCDI is entitled to a 73% revenue share and the landowner 27%. The project is expected to generate sales of EGP80.0 billion to be collected over 11 years.

EGTS (FV: EGP1.68, EW) sold a land plot in Sahl Hasheesh for USD4.1 million (translating into EGP0.12/share).

IRAX would be voluntarily delisting from the EGX within three months and offered to buy back the shares from objecting shareholders for EGP 1,250 per share, 52.4% above the stock’s closing price on 9 July and 38.6% above the three-month average up to 10 July. USD125 mn will be in debt financing from GCC banks, with the remainder will be financed from internal resources.  

The SFE is selling 27% of Ethydco to Abu Dhabi sovereign wealth fund ADQ. The sale is taking place before finalizing SKPC’s acquisition on Ethydco during the current quarter. If we used the latest fair value issued by SKPC and the IFA for Ethydco, the government would be selling 27% of Ethydco for USD293 million. Thus, we believe this deal will not affect the acquisition deal.

Raya Electronics, a subsidiary of RAYA, announced a collaboration with Lexmark, the global printer industry leader, through a strategic partnership agreement. Lexmark acquired the largest market share in Egypt with 62% of total sales of multi-function printers during 1Q23.