Egypt to initiate IPO programme under IMF-backed loan deal in March: Source

Doaa A.Moneim , Wednesday 8 Feb 2023

Egypt intends to initiate the first stage of the initial public offering (IPO) programme under its new loan agreement with the International Monetary Fund (IMF) in March before the completion of the programme's first review, a source close to the cabinet’s discussions told Ahram Online.

Stock Exchange
File Photo: Stock Exchange in Cairo. Reuters


Under the IMF-backed $3 billion programme, the IMF scheduled the first review to be conducted by mid-March, paving the way for Egypt to receive the second tranche of the loan worth $347 million by end-March once the fund approves the review results.

The source told Ahram Online that the government intends to offer minor stakes in a number of state-owned companies under the IPO programme, which will not exceed 25 percent of each offered company.

He added that companies in the energy, oil, fintech, and banking sectors are likely to be offered in March for local, Arab, and foreign investors.

Egypt told the IMF it will secure between $2 billion and $2.5 billion in finances from selling state-owned assets as part of other funds the government commits to obtain in order to finance the funding gap Egypt would experience over the duration of the programme (four years), estimated at a total $17 billion.

Egypt pledged to secure $2.6 billion from the World Bank through FY2025/26, $400 million from the Asian Infrastructure Investment Bank, $300 million from the African Development Bank, $600 million from the Arab Monetary Fund through FY2023/2024, $1 billion from the China Development Bank, and $8.6 billion from the sale of state-owned assets.

The government also pledged to the IMF to slow down national projects in order to limit pressure on the foreign exchange market and inflation.

Egypt has also pledged to increase the role of the private sector in growth in parallel to reducing the size of the state’s footprint in the economy, levelling the playing field between public and private institutions, and strengthening governance and the business climate to support export-driven and private sector-led growth.

First Deputy Prime Minister and Minister of Planning and Economic Development Hala El-Said started this week a tour in a number of Gulf Cooperation Council countries to showcase Egypt's investment opportunities.

Prime Minister and head of the IPO programme committee Mostafa Madbouly said last week that the government is considering offering 20 state-owned companies in the Egyptian Exchange for the first time and additional stakes in already listed firms.

The source said that the number of likely offered companies and the size of stakes is still up in the air.

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