Egypt: The Egyptian government proposes to sell a 10% stake in the public mobile operator Telecom Egypt

The Egyptian government is proposing to sell a 10% stake in state-owned mobile operator Telecom Egypt, Reuters reported on March 6, citing people familiar with the matter.

This 10% stake, which is worth around 4.55 billion Egyptian pounds (148 million dollars) at the operator’s current share price on the Egyptian Exchange, could be sold to local investors or foreigners, the same source added.

The operation is led by local investment banks CI Capital and Ahly Pharos.

The Egyptian state holds 80% of the capital of Telecom Egypt, while the remaining 20% is listed on the local stock market.

Egypt, which suffers from a severe shortage of foreign currency, announced last February the sale of state stakes in 32 companies operating in 18 distinct sectors by March 2024 with a view to mobilizing budgetary resources and revive the growth of the Egyptian economy, which has suffered the repercussions of several external shocks.

The Arab world’s most populous country’s external financing needs for fiscal years 2023 and 2024 are expected to reach $19 billion and $22.5 billion, respectively, according to a recent report by ratings agency Fitch Ratings.

The progressive withdrawal of the State from several productive sectors and the strengthening of the weight of the private sector in the economy also feature in the economic reform program submitted by the Egyptian government to the International Monetary Fund (IMF) in return for a loan of 3 billion dollars over 46 months approved by the multilateral financial institution last December.

The Egyptian government had already adopted at the end of December 2022 a “Strategic document on corporate shareholding“, which provides for a significant disengagement of the State from the productive sector for the benefit of local and foreign private investors, with a view to bringing the sector’s contribution private to the economy at 65% in 2025, compared to 30% in 2021.