Sherif Samy, chairman of the Egyptian Financial Supervisory Authority (Photo: AL-Ahram)
A scheme to finance a new waterway alongside the Suez Canal by offering staggered shares for Egyptians is not possible, according to the state's financial regulator.
On Sunday, Egypt's president Abdel-Fattah El-Sisi announced plans to dig a new 72-km waterway parallel to the Suez Canal that will be entirely financed by Egyptians through shares – priced at $100 for Egyptians abroad, LE100 for locals and LE10 for students.
However, Sherif Samy, head of the Egyptian Financial Regulatory Authority (EFSA), told Ahram Online that differentiating share prices in an initial public offering (IPO) for the Suez Canal project is infeasible.
Billed as purely a national project, the cost – $4 billion for dry digging the waterway and then $8.2 billion for underwater tunnels – has not been included in this financial year's budget.
In his speech at the future site of the waterway in Suez on Tuesday, El-Sisi said that the project will be funded through issuing bonds and shares to local banks and Egyptian citizens.
Companies are allowed to offer shares to only Egyptians, as per the country's financial regulations, Samy said, pointing out that Export Development Bank of Egypt does so.
But he said he has not received any requests yet by the new Suez Canal project to issue the IPO.
"Only companies can apply for an IPO, so the new project needs to establish a new company first," said Samy.
It is possible to issue two types of shares in two different currencies – as Faisal Islamic Bank of Egypt does – but even then both shares would have almost similar values, added Samy.