Egypt announces small additional sale in privatization program

Egypt has made a small, additional sale in its privatization program, two ministers and a real estate mogul told journalists at a Wednesday press conference.

The deal, worth just US$128 million, will see Hesham Talaat Mostafa buy an additional 12 percent of the state’s portfolio of hotels.

The presser, held more than two hours behind schedule, marks a return to business for the government after weeks of silence on the privatization program, as the focus shifted to the assault on Gaza. 

It is also the government’s first big press appearance after President Abdel Fattah al-Sisi’s election victory.

New deal

ICON, the conglomerate owned by Talaat Mostafa and ADQ, is set to take an additional 12 percent of the state holding company for hotels.

Prime Minister Mostafa Madbuly, Planning Minister Hala al-Saeed and Mostafa signed off on the deal during the Wednesday press conference at the new administrative capital.

The state holding company for hotels owns several historical hotels in Luxor, Aswan, Cairo and Alexandria.

Mostafa had already agreed earlier in 2023 to purchase 39 percent of the holding company for $700 million. But with the newly minted agreement, the real estate magnate has now closed a larger deal, to take 51 percent of the company for a total of $828 million, he told the press on Wednesday.

ICON transferred the payment to the government last week, said Mustafa, with part of the deal financed in cash and the rest to be paid for through Gulf loans, Mostafa said the state received $800 million.

$5.6 billion in total sales

Madbuly also announced on Wednesday that the state has now raised a total of $5.6 billion through the total or partial sale of 14 companies.

The figure represents an additional $3.7 billion worth of asset sales since July, when the state said it had raised $1.9 billion.

It wasn’t immediately clear where the additional revenues had come from.

Madbuly’s government launched the privatization programme in early 2023, planning to sell off assets in order to raise revenue for the public deficit.

Egypt found itself unable to service its public debt following Russia's invasion of Ukraine in 2022, which led to declining investor interest in emerging markets and a growing foreign currency shortage in the Egyptian economy.

To alleviate the shortage, Egypt signed a $3 billion loan program with the International Monetary Fund in 2022. The loan’s terms also recommend that the state raise additional funding by selling off its shares in companies.

Accordingly, the government produced a list of 32 companies, stating its intention to sell shares in at least eight of them, either on the stock exchange or to private investors, to raise revenue by March 2024.

In July, it said it had reached $1.9 billion of its target, receiving $1.65 billion in much-needed foreign currency and the rest in Egyptian pounds. It had announced deals to sell shares in Telecom Egypt, the state hotels company, three state petrochemicals firms and a steel company. 

In November, the government also sold 30 percent of its shares in the state tobacco firm, Eastern Tobacco, in exchange for $625 million to a UAE firm.

Madbuly also announced on Wednesday that the International Finance Corporation is studying an additional 50 companies to be included in the programme for December 2024 from four sectors: airports, telecommunications, banking, and insurance sectors.