Cairo (APD) - Egypt's Ministry of Communications and Information Technology announced that proposal from the global investment banking firm Credit Swiss First Boston (CSFB) was the best technical and financial proposal for advising on a stake's privatization in state-owned Telecom Egypt (TE), Egypt's business daily, al-Alam al-Youm reported this weekend.
The ministry said that Credit Swiss First Boston would lead a consortium including Egyptian Financial Group Hermes Holding Company and Commercial International Bank (CIB).
Tarek Kamel, the minister of Communications and Information Technology, said that Egyptian cabinet would determine the stake to be privatized in Telecom Egypt at a later date.
Telecom Egypt's stake privatization process is expected to be carried out by the end of the year with about 10-20% stake are expected to be privatized and offered on the international markets.
The consortium would carry out a preliminary evaluation for the market and would also advise Telecom Egypt on choosing the privatization method either through selling a stake to a strategic investor or launch an Initial Public Offering (IPO).
Last May, Telecom Egypt has called on investment banks to participate in the comprehensive analysis and evaluation for privatizing a stake in Telecom Egypt. Egypt's Prime Minister, Ahmed Nazif, announced last April that the Bank of Alexandria would be privatized during 2005, in addition to a stake in Telecom Egypt.
Net profits of Telecom Egypt (TE) dropped 7.2% to reach LE 1 billion in 2004, compared to LE 1.1 billion in 2003. Although the total number of subscribers rose 8%, to 9.5 million, in 2003, and the fixed-line penetration rate climbed slightly to 13.6% in 2004 - compared to 12.8% in 2003 - earnings per share (EPS) in 2004 dropped 13.6% to LE 4.77 in 2004 from LE 5.52 a year earlier.
Telecom Egypt is fully owned by the Egyptian government and has a monopoly over the country's fixed-lines networks. The company is the largest fixed-line provider in the Middle East and in Africa. [FC]
By Eman Wahby
© APD (Arab Press Digest) 2005
