The Qatar Investment Authority negotiates over the purchase of a 30% stake of the Holding Company for Tourism and Hotels, sources told Daily News Egypt on Saturday.
The company includes 7 hotels: Cairo Marriott, Aswan Cataract, Haram Mena House, Luxor Winter Palace, Alexandria Cecil, Movenpick Aswan, and Elephantine Aswan.
The sources added that the initial evaluation of that share will reach about $750m, and that the initial signing will take place within a month, while implementation will take place within two months, explaining that the Sovereign Fund of Egypt evaluated the hotels before offering them to strategic investors, and thus the deal evaluates the value of the company at $2.250bn.
Last February, Minister of Public Enterprises Sector Mahmoud Esmat said that the final value of the company will depend on the result of the fair value study, which is prepared by international companies, for each of its hotels, and according to the sources, the agency will be represented in the company’s board of directors.
The hotels company owned by the Ministry of Public Enterprises, which was included in a holding company between the Sovereign Fund of Egypt and the Ministry, comes within the government offering program that includes 32 companies, which was revealed by the Cabinet at the end of last February.
Ayman Suleiman, head of the Sovereign Fund of Egypt, said earlier that the offering of the Historic Hotels Company will be through increasing the capital of a strategic investor in dollars with the aim of raising the efficiency of hotels to increase their profitability, in preparation for offering them on the Egyptian Exchange at a later stage.
The Qatar Investment Authority is conducting advanced negotiations with the Sovereign Fund of Egypt about several potential deals in the Egyptian market, and Qatar deposited one billion dollars in the Central Bank last year under the balance of deals expected to be implemented.
Egypt seeks to enhance direct foreign investment flows during the current period in which the country faces a currency shortage crisis, and seeks to return to the path of the International Monetary Fund program.
The government aims to offer some government assets to the private sector to acquire percentages of them, and the government estimates the value of these assets at about $40bn, to be offered over a period of 4 years, at an average of $10bn each year.