Abu Dhabi Holding to invest $800mln in three Egyptian companies with government guarantee

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Abu Dhabi Development Holding, a state-owned investment company in the UAE, has agreed to invest $800m to buy stakes in three Egyptian government companies, with a guaranteed return of 8% per year for four years, sources told Daily News Egypt.

The deal, which is expected to be completed in this quarter, involves acquiring 25% of the National Drilling Company (NDC), 30% of the Egyptian Ethylene and Derivatives Company (ETHYDCO), and 35% of the Egyptian Linear Alkyl Benzene Co. (ELAB).

The government, through the Central Bank of Egypt (CBE), will provide a four-year guarantee for the value of the investment, as well as an annual internal rate of return of 8% after tax deduction. The guarantee will be reduced by the proceeds of exiting the investment through a public offering or a sale to a strategic investor.

The deal was signed in July 2023, after a memorandum of terms and conditions was agreed upon between the parties. The deal is part of the government’s plan to exit assets worth $1.9bn that it owns in various sectors.

The three companies are among seven companies in the portfolio of the Pre-IPO Fund of the Sovereign Fund of Egypt (TSFE), which aims to prepare state-owned companies for listing on the stock market or selling to investors. The other four companies are Misr Technology Services, El Mostakbal for Urban Development, Misr Life Insurance, and Salhia Investment & Development Company.