The Saudi Egyptian Investment Company, a newly launched investment firm of the Kingdom’s Public Investment Fund (PIF), has agreed to acquire minority stakes in four large listed Egyptian companies, with a total investment of $1.3bn.
The targeted companies are e-finance, Abu Qir Fertilizers, Misr Fertilizers Production Company (MOPCO), and Alexandria Container and Cargo Handling Company (Alex Cont).
The fund acquired a 25% stake in e-finance, from the stake owned by the National Investment Bank in the company, at a value of EGP 7.27bn. It bought an estimated 20% stake in Alex Cont, from the Holding Company for Maritime and Land Transport stake in the company.
The acquisitions also included 250.1 million shares (19.8% stake) of Abu Qir Fertilizers for EGP 7.27bn (EGP 29.07 per share), collectively sold by Al Ahly Capital Holding, the Industrial Development Authority, Misr Life Insurance, and Misr Insurance.
Moreover, the Ministry of Finance, the National Investment Bank, and the Egyptian Natural Gas Company (GASCO) sold their collective stake (25%) in MOPCO at a value of EGP 7.1bn (EGP 123 per share).
Daily News Egypt learned that Matouk Bassiouny and El-Hennawy acted as the legal advisor for Abu Dhabi’s state-owned holding company ADQ, while Baker McKenzie was the advisor to the Egyptian government, and Al Ahly Pharos and the Financial Group participated as brokers for the deals.
Sources close to the deal pointed out that the four acquisitions will not be the last in the Egyptian market, and that there are several other deals to be implemented after Egypt signed a loan agreement with the IMF, which will give confidence to large institutions to pump more liquidity in Egypt.
The sources emphasized that the Saudi side does not seek to delist or acquire entire companies in the Egyptian market.
The Saudi Egyptian Investment Company will appoint representatives on the boards of directors of the four companies during the coming period.
The new acquisitions by PIF come four months after the Abu Dhabi Investment Authority’s acquiring of minority stakes in five listed Egyptian companies at a total value of $1.8bn, bringing the total transactions to about $3.1bn within the state’s target to sell assets worth $10bn annually in a four-year programme.
Egypt aims to reduce its budget deficit of about $33bn this year, especially after the worsening conditions globally due to the Russian-Ukrainian war and its impact on the supply chain.
Emerging markets, like Egypt, have been deeply affected by these circumstances, which prompted the government to secure more US dollar liquidity.
Hala El-Said, Minister of Planning and Economic Development, and Chairperson of The Sovereign Fund of Egypt (TSFE), said in a statement that the deal comes within the framework of the state’s plan to expand the ownership base and encourage foreign direct investment, and the strategy of TSFE to attract Arab and foreign investors and provide promising investment opportunities in various economic sectors.
She added that this deal reflects the confidence of foreign investors in the Egyptian economy, as it is one of the promising strategic markets that have many attractive investment opportunities.
The share of MOPCO closed at EGP 105.99 on Tuesday, while the share of e-finance fell to EGP 15.74. The share of Alex Cont closed at a price level of EGP 9.94, and the Abu Qir Fertilizers share increased to EGP 24.20.