The economic committee of parliament plans to meet with the ministers of finance, planning, and public sector affairs soon in order to discuss the government-owned company offerings on the Egyptian Exchange (EGX), according to the head of the committee, Amr Ghallab. He added that there are several issues to be studied with the government in that regard.
In an exclusive statement to Daily News Egypt, Ghallab said that parliament will discuss with the government increasing the share of company offerings on the EGX to exceed 30%, as well as increase the time required for the offerings.
Minister of Finance Amr El-Garhy said in previous press statements that the government targets a specific ratio of the shares of 23 state-owned companies, ranging between 15-30% throughout a period of 30 months.
Ghallab said that not only will the issue of selling assets be discussed, but also the issue of administration privatisation, in order to turn losing companies into profitable ones.
“The government’s vision was clear regarding the issue of launching offerings over the upcoming period, and did not include any trends for privatisation of administration. The issue is about offering shares of companies on the EGX in order to fund the development of production lines through expanding the ownership base,” said the chairperson of the Chemical Industries Holding Company, Medhat Nafea.
The financial statement of the general budget of the upcoming fiscal year revealed the government’s tendency to launch six to eight companies on the EGX, worth a total of EGP 10bn. However, many members of parliament are worried this amount would be allocated for funding the budget deficit throughout the next fiscal year, according to Amr Al-Gohary, member of the economic committee.
Al-Gohary added that it is better that this amount either funds the development plans of these companies or be used to establish new companies.
The financial statement issued by the Ministry of Finance for the draft budget of next fiscal year acknowledges that a percentage of the proceeds of the offerings will be directed to the state’s general budget.
Mohamed Hassouna, head of the technical sector at the Ministry of Public Sector Affairs, said that the extent to which companies planned to be launched on the EGX will be able to benefit from the sale proceeds depends on feasibility studies of new development projects and plans.
Hassouna added that there are several public sector companies that have feasibility studies for development plans for the upcoming period. He refused to reveal the number of these companies.
The economic committee of parliament last week held a meeting with Minister of Public Sector Affairs Khaled Badawi in order to discuss the programme of offerings on the EGX over the coming period.
He added that the committee will also discuss the timetable for the offerings, as the future of the upcoming offerings looks good in light of the legislative structure prepared by parliament over the past period.