Monday, Nov 10, 2008

CAIRO (Dow Jones)--Egypt's ruling party will propose a program of voucher privatization for state-run assets where it will give free coupons to Egyptian citizens who can then benefit from their interest, sell them or invest them in various funds.

"We are proposing today a complete program which focuses on transferring ownership of shares in state-owned companies to the Egyptian citizen through distributing a portfolio of shares free to citizens," a working paper of the policy secretariat of the National Democratic Party said.

The proposed system will take a year to implement after it goes to the council of ministers for approval and then to the parliament for ratification, according to the paper.

Under the proposed program, state assets will be classified into four categories, the first being those companies which the state wants to maintain a 67% stake that include pharmaceuticals, iron and steel industries, cement, fertilizers, sugar and copper companies.

The second category is for companies where the government wants to continue holding a 51% majority stake and includes firms working in the transport and tourism industry while the third category is for companies where the state wants to maintain a 30% holding and includes companies that distribute goods and services.

Finally, the fourth category will include companies that are eliminated from the program because they already have a maximum private ownership or they are loss-making companies.

Egypt's privatization program, which includes 155 state-owned companies, began in 2004.

The government pumped 8.5 billion Egyptian pounds ($1.5 billion) to revamp these companies from July 2004 to June 2005 and reduced bad debt to EGP10 billion by June 2007 from EGP31.5 billion in June 2004.

State-owned companies made EGP5.5 billion in profits in the fiscal year 2007-2008 compared to EGP1.3 billion losses incurred in the year 2003-2004. 


   -By Maha El Dahan, contributing to Dow Jones Newswires, +20122267850, mahaeldahan@yahoo.com

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(END) Dow Jones Newswires

10-11-08 1159GMT