Egyptian jet fighters trail smoke as they fly over the capital Cairo on June 2, 2018, during the inauguration of the Egyptian President Abdel Fattah al-Sisi for a second four-year term in office during a special parliament session. Egyptian President Abdel Fattah al-Sisi was sworn in on Saturday for a second four-year term in office during a special parliament session broadcast live on state television. Sisi took the oath in a packed house and in front of members of his government, after winning 97 percent of valid votes in the March presidential election.
 / AFP / STR
Egyptian jet fighters fly over the capital Cairo. Government is considering adding more state-owned companies to the list of firms in which investors can get majority stakes. AFP

Egypt considers offering majority stakes in more state-controlled companies



Egypt is considering adding companies to the list of state-run firms in which investors can secure majority stakes as it readies to launch a program aimed at reviving the battered public sector.

The government is planning to start with the sale of Heliopolis Housing and Eastern Tobacco in October, Public Enterprise Minister Hisham Tawfik said.

So far, however, a majority offering is available only in Heliopolis, with 40 per cent of the property developer to remain under state control.

“Our target is to improve the companies’ performance and to allow private sector participation in their boards,” Mr Tawfik said. This could come through “giving investors stakes in these companies and allowing them to have majority ownership in some of them”, he added.

Officials have long complained about what critics describe as bloated and inefficient state-run firms and have struggled to push them toward profitability.

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Read more:

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The current program marks a first step toward attempting to strike a balance between efficiency, profitability and raising revenue for the government. The other three companies on offer in the first stage are Abou Kir Fertilizers, Alexandria Container & Cargo Handling and Alexandria Mineral Oils. Egypt is hoping to secure 30 billion pounds ($1.7bn) from the first stage and 100bn from the offerings overall.

Alexandria Container and Eastern Tobacco, the country’s largest cigarette maker, will undergo 1-to-10 stock splits before being offered, Mr Tawfik said.

The second portion of the 23 companies is expected to go on offer in the first quarter of 2019, he said, although officials have yet to decide on which firms or the sizes of stakes to be sold.

In the next nine months, the government will study the performance of the 121 public-sector companies that his ministry oversees.

“Strategic investors will be invited in, through management contracts,” to run some of the companies that are unlikely to turn a profit under their current leaderships, he said.

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Diriyah project at a glance

- Diriyah’s 1.9km King Salman Boulevard, a Parisian Champs-Elysees-inspired avenue, is scheduled for completion in 2028
- The Royal Diriyah Opera House is expected to be completed in four years
- Diriyah’s first of 42 hotels, the Bab Samhan hotel, will open in the first quarter of 2024
- On completion in 2030, the Diriyah project is forecast to accommodate more than 100,000 people
- The $63.2 billion Diriyah project will contribute $7.2 billion to the kingdom’s GDP
- It will create more than 178,000 jobs and aims to attract more than 50 million visits a year
- About 2,000 people work for the Diriyah Company, with more than 86 per cent being Saudi citizens

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