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(Ecofin Agency) – In February, the Egyptian government announced plans to sell its stakes in 32 companies by March 2024, in a context where economic growth is stalled by external shocks. Telecom Egypt, 80% owned by the state, was rumored to be among the targeted companies.
The Egyptian Ministry of Finance, the main shareholder of Telecom Egypt, has confirmed that the government is considering selling more of its stakes in the telecom operator. It announced a release issued on the Egyptian Exchange (EGX) on Tuesday, March, 7.
According to Telecom Egypt, the plan is still in the consideration phase and no official decision has been taken yet. It also urged shareholders to exercise caution and circumspection in the dealings they base on officially disclosed information.
On Monday 6 March, Reuters reported that the Egyptian government is proposing to sell a 10% stake in Telecom Egypt, citing sources familiar with the matter. The deal, estimated to be worth EGP4.55 billion ($147.35 million), would reportedly be led by local investment banks CI Capital and Ahly Pharos.
The announcement comes after the government disclosed, in February 2023, that it would sell its stake in 32 companies operating in 18 sectors by March 2024. The plan was aimed to raise financial resources and revive the economy, which is facing several challenges including foreign currency shortage.
The proceeds from the sales of part of Telecom Egypt could also finance investments to improve the state-owned company’s position in the mobile segment of the Egyptian telecom market. According to market research firm Omdia, as of the second quarter of 2022, the operator was controlling 10% of the market, far behind Vodafone Egypt (42%), Orange (26%), and Etisalat (22%).
For FY2022, the company posted consolidated revenues of EGP 44.3 billion, an increase of 19% year-on-year. Its EBITDA reached EGP 17 billion while net profit increased by 9% year on year to EGP 9.2 billion, driven by strong operational performance.
Isaac K. Kassouwi
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