In a significant step towards implementing its economic reform program, Egypt has successfully sold a 9.5% stake in state-run telecommunications company Telecom Egypt. The sale raised over 3.75 billion Egyptian pounds ($121.6 million) and serves as a clear message to investors that the country is committed to pursuing its economic transformation agenda.
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Financial Boost for Egypt
The proceeds from the stake sale will help Egypt meet its forthcoming foreign debt obligations, providing much-needed financial support during these critical months. The sale of state assets has become a crucial strategy for Egypt to generate funds and foster economic stability, according to multiple media reports.
Telecom Egypt Stake Sale
Telecom Egypt, the first integrated telecom operator in the country and one of the largest subsea cable operators in the region, has been identified as a strategic asset for privatization. This marks the second sale of state assets since Prime Minister Mostafa Madbouly's pledge on April 29 to proceed with the sales program, aiming to sell assets worth $2 billion by the end of June.
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The government divested 162.2 million shares, equivalent to a 9.5% stake in Telecom Egypt, as stated in the filing submitted to the Egyptian stock exchange. The shares were priced at 23.11 Egyptian pounds per share. As part of the sale process, the government will offer a 0.5% stake for purchase by company employees until May 25, 2023.
Government Ownership Reduction
This divestiture aligns with Egypt's commitment to reduce the state's involvement in the economy and create space for private companies to play a more significant role. According to reports, It falls under the $3 billion, 46-month financial support package signed with the International Monetary Fund in December, which includes economic reforms aimed at fostering a favourable business environment and attracting foreign investment.
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Opening Doors for Private Sector
The sale of the Telecom Egypt stake will reduce the government's ownership to 70%, down from the previous 80%, while the remaining 20% will be available for trading on the Egyptian Exchange. This move not only strengthens the country's fiscal position but also opens doors for increased private sector participation in Egypt's telecommunications sector.
