TFSE aims to maximize state-owned assets return: Planning Minister

H.E. Dr. Hala El-Said, Minister of Planning and Economic Development who also acts as Chair of the Board of Directors of The Sovereign Fund of Egypt (TSFE) said that one of the main pillars of the national structural reform program is increasing private sector participation.

 

El-Said referred to the state ownership policy document, which includes a set of different tools to ensure its implementation. These tools include offering assets or companies to raise capital in partnership with the private sector.

 

This came during the press conference of H.E. Dr. Mostafa Madbouly, Prime Minister. This was held today after a Cabinet meeting in The New Administrative Capital.

 

El-Said referred to TSFE as an investment arm of the state aimed at increasing the participation of the local and foreign private sectors and maximizing the return on state-owned assets.

 

 

She stressed that TSFE is owned by the Egyptian people and aims to preserve state wealth for future generations.

 

 

The Minister of Planning and Economic Development reviewed the progress made over the past months.

 

 

She noted that a company with several hotels was offered to a group of investors to raise capital for a minority stake in these hotels. In response to the various offers, one company received a 37% increase in capital

 

El-Said explained that this company's capital increase was $700 million.

 

El-Said added that this also comes within the framework of improving hotel efficiency and development. This will attract more tourists, supporting the Egyptian government's goal of reaching 30 million tourists.

 

The Minister of Planning stated that the second offering represented the offering of stakes in 3 companies, as minority stakes between 25 and 30%. These companies are Ethydco, the Egyptian Drilling Company, and Elab.

 

The Abu Dhabi Development Holding Company has acquired the offering, which is worth $800 million.

 

She also referred to the third offering, which is the exit of one of the Egyptian private sector investors (Ezz El Dekheila Company) and his desire to obtain the rest of the state’s contributions, as the National Investment Bank was assigned to manage the public offering for about 8 parties.

 

El-Said explained that about 31% of public sector shareholders exited at $241 million. This has enabled the company to implement its investment expansions and localize more industries related to the steel industry.

 

El-Said also reviewed the proposals that the government is currently working on and its procedures, which are represented in the Jabal Al-Zeit station, where TSFE made a competitive offer for the station to several investors, and a group of non-binding offers was received, studied, and negotiated with investors to reach the best one, and the offer of the highest price was accepted in June 2023.

 

El-Said indicated that the investor who submitted the highest price offer has 60 days to conduct a due diligence examination. She added that the award is expected to be announced next October, and it will reach more than $300 million. 

 

There were 6 non-binding offers received from a national company's data room in February. Three companies were selected from these offers.

 

El-Said added that the other offering was related to water desalination plants. There is a five-year plan drawn up by the Egyptian government and the Ministry of Housing for offering 21 stations with a total capacity of 3.3 million cubic meters per day. This plan has investments exceeding $3 billion in the first phase, which ends in 2025.

 

TSFE studied this issue in cooperation with the Ministry of Housing, the Participation Committee in the Ministry of Finance, and the committee formed by the Prime Minister.

 

 

El-Said confirmed that a decision was taken by the Cabinet to rationalize investment spending in the state’s plan for the next fiscal year, as all new projects that have not been implemented have been excluded except in cases of extreme necessity, as the plan includes the completion of projects that are being implemented and whose implementation rate has reached 70%.

 

 

 

All projects with a dollar component were also excluded. This points to the importance of providing state resources and directing them to the neediest groups or social protection programs.

 

El-Said explained that the value of excluded and deferred projects amounted to EGP 247 billion, including housing and utilities, transportation and roads, and communications and information technology.