October 31, 2019 / 11:55 AM / 13 days ago

Egypt's army companies should be floated: Sisi

CAIRO (Reuters) - Companies owned by Egypt’s military must be allowed to sell shares on the stock exchange alongside other state companies slated for privatization, President Abdel-Fattah al-Sisi said on Thursday.

FILE PHOTO: Egyptian President Abdel Fattah al-Sisi attends a meeting with Russian President Vladimir Putin on the sidelines of the G20 summit in Osaka, Japan June 29, 2019. Sputnik/Mikhail Klimentyev/Kremlin via REUTERS

Last year, the government said it planned to sell minority stakes in 23 state-owned companies in an initial phase of privatization, part of a plan to raise up to 80 billion Egyptian pounds ($4.97 billion).

The program has been repeatedly delayed due to weak markets, legal hurdles, the readiness of each company’s financial documentation and in the case of some companies a downturn in the business cycle, a government adviser on the share sales said this month.

The sale of minority stakes in two of the state companies are planned by year-end, officials have said.

“The offerings being prepared by the Egyptian state should include a chance (for) the armed forces companies. In this way we will have opened a door for the Egyptian people and society to these companies,” Sisi said at a ceremony to inaugurate two new army chemicals factories in Abu Rawash, west of Cairo.

He gave no details.

Sisi said last year that Egypt plans to offer shares on the stock market of a $1.1 billion cement plant owned by the military, but no steps have yet been announced.

The military has launched numerous projects across the country since Sisi came to power in an election after the armed forces ousted Islamist President Mohamed Mursi in 2013 following mass protests against his rule.

Some critics complain that such projects represent unfair competition but Sisi sought to reassure the private sector rivals that army enterprises are not targeting them.

“It is important to say that the private sector is welcome to participate in all what we are talking about,” Sisi said, referring to the army projects.

He also said Egypt could dramatically expand the size of its new sovereign wealth fund, formed this year with a paid-in capital of 5 billion pounds and a licensed capital of 200 billion pounds.

The fund could be increased to “more than several trillion pounds,” he said, adding that it “aims to contribute to sustainable economic development through management of its funds and assets”.

Reporting by Mahmoud Mourad and Ahmed Tolba; Editing by Catherine Evans and Patrick Werr

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