Egypt is offering an additional stake in state-run Telecom Egypt to investors, as the North African nation looks to monetize its assets and raise hard currency.
(Bloomberg) —
Egypt is offering an additional stake in state-run Telecom Egypt to investors, as the North African nation looks to monetize its assets and raise hard currency.
The telecommunications firm, which is 80% government-owned, plans to sell at least a further 10% holding, according to people briefed on the matter. The company has been told by Egyptian officials that an extra stake offering is among options they’re weighing, it said Tuesday in a statement to the local stock exchange. It called the proposal “preliminary.”
Separately, the government is weighing two offers from the Qatar Investment Authority and Saudi Arabia’s Public Investment Fund for part of the telecommunication company’s 45% stake in Vodafone Egypt, the people said, declining to be identified due to the sensitivity of the discussions. They didn’t specify the size of the stake that could be offered.
Representatives for Egypt’s government, the QIA and PIF didn’t immediately respond to requests for comment.
Egypt last month unveiled a list of 32 state-held companies they would either newly list on the bourse, offer additional stakes in, or sell to strategic investors. Telecom Egypt wasn’t among them, but the potential offering suggests the government may tap another of its most valuable assets to help ease a foreign-currency crunch fueled by Russia’s invasion of Ukraine.
Keen to lure back investors after billions of dollars in outflows stemming from Russia’s invasion of Ukraine, the government agreed to sweeping reforms that helped secure a $3 billion International Monetary Fund loan. Key to that agreement was shifting to a flexible exchange-rate regime. The pound has been devalued three times over the past year.
Read also: Egypt Puts State Assets Up for Sale to Hunt Foreign Exchange
Authorities have been in long-running talks about selling Telecom Egypt’s holding in Vodafone Egypt to a Gulf-based sovereign wealth fund. The QIA was looking to buy 20% of Vodafone Egypt from Telecom Egypt, Bloomberg reported in October.
That deal appeared part of the $10 billion in investments Egypt’s Gulf allies pledged last year. To date, however, only a fraction of that has been delivered amid uncertainty over whether authorities will further devalue the currency or fully enact wide-ranging economic reforms they pledged.
–With assistance from Julia Fioretti.
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