In a decisive move aimed at propelling its reform agenda forward, Egypt has effectively divested a 9.5% stake in the state-run telecommunications company, Telecom Egypt, raking in an impressive sum of 3.7 billion Egyptian pounds (equivalent to approximately $121 million). The transaction, which occurred on Sunday, was executed via the Egyptian Stock Exchange, with each share priced at 23.11 Egyptian pounds, as confirmed in a filing submitted by the company.
Moreover, the government has concurrently revealed its intention to extend an additional 0.5% stake in Telecom Egypt to the company’s employees, as specified in a separate filing on Sunday. This move forms part of the government’s broader strategy to foster employee participation and align the workforce’s interests with the company’s growth trajectory.
This groundbreaking deal, which has been under discussion since March, serves as a momentous initial step in Cairo’s comprehensive program designed to ameliorate the nation’s faltering economy through the divestment of state-owned assets. By strategically reducing its stake in various entities, the government aims to attract private investment, boost market confidence, and drive economic growth.
As part of the overarching economic reform agenda, the government has announced plans to partially sell its shareholdings in 32 companies, either through initial public offerings or private placements. Notably, these state-linked enterprises encompass a range of entities operated by the Egyptian military, although the precise number remains undisclosed. Presently, only Wattaneya and Safi have been publicly identified as entities falling within this framework.
The Egyptian economy has endured severe setbacks due to the impacts of the ongoing COVID-19 pandemic and the protracted conflict in Ukraine. As a result, the national currency has suffered significant depreciation, losing over 50% of its value following three successive rounds of devaluation since March of the previous year. Against this backdrop, the divestment of the stake in Telecom Egypt not only bolsters Egypt’s reform initiatives but also underscores the government’s resolute commitment to resuscitating the nation’s economy during these turbulent times.
Looking ahead, with further divestment plans in the pipeline, Cairo seeks to attract substantial investment, stimulate economic growth, and secure a prosperous future for the Egyptian populace. This deliberate approach towards economic restructuring demonstrates the government’s unwavering determination to navigate challenges effectively and forge a path towards sustained progress and prosperity.