Egypt prepares ground for $10bn share sales in state energy companies
Egypt is set to launch its initial public offerings in government-owned companies with oil sector businesses, aiming to collect up to US$10 billion dollars within three to five years, the minister of investment said.
The government is studying which companies will participate in the programme, said the minister of investment Dalia Khorshid. The government will pick local and international investment banks to advise on the offerings.
“Many companies will be restructured in the coming period, beginning with electricity companies, to prepare them for share sales on the bourse,” Ms Khorshid said. Proceeds will be used, in part, to narrow the budget deficit, she said.
The share sales are part of a broader government plan to help fund one of the Middle East’s widest budget deficits and encourage foreign investment in an economy battered by almost six years of unrest. The most populous Arab country has also reached an initial agreement for a $12bn loan with the IMF.
The ministry is surveying investors on whether to issue a new investment law or modify the current one, Ms Khorshid said. It also plans to present a new bankruptcy law to the cabinet within weeks, she said. The law is meant to help investors exit failed projects and restructure debts.
The share sale news came a day after Egypt announced it will hold talks with Russia to try to resolve a trade dispute over agricultural produce that has strained their relations.
Moscow has accused Cairo, the largest export market for Russian cereals, of “haggling” as a marketing strategy by halting wheat imports from Russia on health grounds.
In response, Russia has suspended imports of citrus fruits from Egypt starting on September 22.
“A high-level committee has been formed … to negotiate with the Russian side, represented by the embassy … on issues of quarantine,” Egypt’s agriculture ministry said.
“A meeting will be held with Russia’s ambassador to Cairo to study issues to be resolved to lift any obstacles,” it said in a statement which praised the level of relations with Moscow.
Egypt, the world’s top importer of wheat, at the end of August toughened its stand against the presence of any trace of ergo, a common fungus, in its imports and has since suspended consignments from Russia.
A senior Russian agriculture ministry official, Vladimir Volik, last week accused Cairo of “haggling” at a time when Russia is primed for a bumper harvest of wheat.
Russian sanitary officials on Friday slapped the ban on citrus fruits from Egypt on sanitary grounds.
Egyptian citrus fruit exports to Russia are worth hundreds of millions of dollars a year and have been on the rise since Moscow put an embargo on a number of fruit and vegetable imports from Turkey.
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Published: September 19, 2016 04:00 AM