Govt source rules out imminent sale of military companies as IMF begins Egypt loan review

The Cabinet restated on Wednesday evening its intention to sell equity in four military-affiliated companies, either by listing them on the stock exchange or through direct sale to a strategic investor. 

The announcement came after a meeting between Prime Minister Mostafa Madbuly, ministers of the economic group, and other officials who have been tasked with executing the long-stalled privatization program.

The EGX also announced the temporary listing of four new government-owned companies on Thursday — Chemical Industries Development Company, Misr Travel, The Egyptian General Company for Tourism & Hotels, and fertilizers manufacturer SEMADCO. 

But two informed sources told Mada Masr that the privatization program is unlikely to move forward soon, with one saying that recent activity is likely intended to reassure the International Monetary Fund.

An IMF mission arrived in Cairo this week to begin the seventh review of Egypt’s ongoing loan program, which is set to conclude at the end of the year.

Speaking on condition of anonymity, a senior government official said that none of the military-owned companies are ready to undergo share sales. 

The government specifically named Wataniya for Petroleum Products Sales and Distribution, Silo Foods, Chill Out gas stations, and the National Company for Road Construction, Development and Management — all affiliated with the military’s National Service Projects Organization — among the assets earmarked for sale

The official ruled out that a listing date will be set for any of them before the end of the fiscal year.

The same source, who is directly involved in the government’s asset sale program, said that initial estimates suggest that only one of these companies is eligible for public listing within three-four months. 

Another is still awaiting the formalization of land ownership procedures, while two are still “far off” due to non-compliance with Egyptian Exchange listing criteria.

Land ownership issues have previously hindered the sale of Wataniya shares to the Abu Dhabi sovereign wealth fund, said the second source, a member of Parliament with close ties to the government. The source said this was due to the lack of data on how the company acquired land, noting that any investor would require title deeds or even lease agreements before attempting a purchase.

The four military-run companies all signed agreements with the Sovereign Fund of Egypt and a number of consulting firms in 2025, committing to restructuring in preparation for their initial public offerings, originally planned for last year.

Listing companies on EGX is tied to a set of regulatory requirements such as submitting financial statements for the preceding two fiscal years, which must be prepared by an auditor registered with the Financial Regulatory Authority and approved by the company’s general assembly.

But with the early arrival of the IMF delegation to Egypt’s capital, the parliamentary source said, the privatization flurry and the steps to publicly list various companies does not represent a meaningful acceleration in the program. 

Rather, the source said, the measures are part of the government’s public-facing performance and the message it wishes to broadcast to the IMF, which has long criticized it for the slow pace of privatization. 

The government source said that the current phase of the privatization program involves finalizing the listing of 30 state-owned companies in total.

The government’s decision to list the companies was one of the new Madbuly Cabinet’s first measures. With the elimination of the Public Enterprise Ministry in the last Cabinet reshuffle, the agency’s ownership of 40 government-sponsored companies was transferred to the sovereign wealth fund.

Another 20 were slated for temporary listing on the EGX by the end of April, and the government later said it would list an additional 10 oil and gas companies.

With Thursday’s new additions to the EGX, 16 of the 20 companies have been publicly listed so far.

A source at a securities trading company previously told Mada Masr that temporary listing can be extended indefinitely with no obligation for trading, provided it is renewed annually in agreement with the FRA. 

The source pointed at the time to the state-owned Banque du Caire, which was temporarily listed on the stock exchange in 2017 though trading is yet to take place on its shares.

The IMF’s reports on its fifth and sixth reviews of the current agreement with Egypt reiterated the fund’s criticism of the stalled privatization process and the continued expansion of the military’s economic activity. 

The reports reiterated the government’s pledge to revitalize the offerings program with four deals before the end of the loan term, as well as deals involving five military-owned companies.

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المصدر: Mada Masr