Egypt reaps benefits of IPO program

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The Egyptian government has started to harvest the gains of the initial public offering (IPO) program.

The program, which was finally launched in February 2023, targeted increasing the private sector’s economic contribution to 65% as part of Egypt’s commitments under the $3 billion loan agreement with the International Monetary Fund (IMF).

In this Factsheet, we highlight the key milestones in the Egyptian government’s journey to liberalize its assets.

The Egyptian Cabinet announced in May 2022 its plan to restructure the economy through lowering the state’s economic footprint and making greater room for the private sector to participate. This plan introduced the State Ownership Policy Document, which defines the contours of the state’s presence in various sectors of economic activity.
For the Egyptian government to exit from various assets, the State Ownership Policy Document defined three main paths, including the government’s withdrawal from 14 activities, maintaining or decreasing its presence in 24 activities, and maintaining or increasing its presence in 24 activities, according to a report on the Government IPO Program by the Cabinet's Information and Decision Support Center (IDSC).
The Egyptian state has stakes in around 705 companies operating in nine economic sectors, and owned by 33 government authorities, including nine governorates, 18 ministries, and other authorities such as the Central Bank of Egypt (CBE) and the Financial Regulatory Authority (FRA).
Around 45.2% of the state-owned companies are affiliated with the Ministry of Public Business Sector.
The majority of state companies are engaged in the transformative industries (245 companies). The state had stakes in 115 companies in the food and accommodation sectors, 90 in the construction industries, and 84 in the financial intermediation activities.
In February, the Egyptian Cabinet announced that it will offer 32 state-owned companiesand banks for sale through IPOs or to strategic investors, starting from the first quarter (Q1) of 2023 to the end of the second half (H2) of 2023. Following this, another three companies were added to the list to reach a total of 35 companies in 19 different sectors.
In June, the government signed an agreement to assign advisory services on Egypt's IPO program to the International Financial Corporation (IFC).
From March 2022 to July 2023, the Sovereign Fund of Egypt (TSFE), in the context of the State Ownership Policy, sold state assets in 13 companies for $5 billion.
Five listed companies were sold to Abu Dhabi Holding Company (ADQ) for $2 billion, in addition to three companies offered for $800 million to the same strategic investor. The Saudi Public Investments Fund (PIF) acquired stakes in four listed companies worth $1.3 billion, while seven historic hotels were sold to Talaat Moustafa Group (TMG) in July for $700 million.
The government will further offer stakes in six projects during the period from October 2023 to June 2024. The expected investments are $ 5 billion.
The stakes will be offered in Gabal El Zeit and Zafarana wind power plants, Siemens Beni Suef power plant, the military-owned companies Safi and Watanya, and water desalination plants.