https://arab.news/r9ahd
- While details are being discussed within the bank, they remain confidential until the official announcement
- Italian lender, which already owns 80 percent of the Egypt-based bank, will buy the remaining 20% and take complete ownership
RIYADH: Egypt is in advanced talks to sell the government’s remaining stake in Alex Bank to Italian private banking firm Intesa Sanpaolo SpA, according to Bloomberg.
This will pose the first major asset sale since devaluating its currency in March.
The agreement will see the Italian lender, which already owns 80 percent of the Egypt-based bank, buy the remaining 20 percent and take complete ownership.
This comes as the government unveiled an initial list of 32 assets it planned to offer investors in sectors ranging from banking to energy and real estate last year. It now targets raising between $2 billion-$2.5 billion by the end of the current financial year in June 2025 from asset sales.
It has been internally confirmed that the prime minister will announce the deal regarding the privatization program of state assets in the coming weeks, a source told Arab News.
While details are being discussed within the bank, they remain confidential until the official announcement, the source added.
Investors and the International Monetary Fund will closely watch the transaction as a sign Egypt’s new government is committed to a state-divestment program. Still, the deal value will likely be significantly lower than the $625 million Egypt raised from a stake sale last year, Bloomberg said.
The North African country is emerging from its worst economic crisis in decades after allowing its currency to plunge 40 percent against the dollar six months ago. The move brought about a fresh wave of funding pledges from the IMF and others, part of a global bailout totaling some $57 billion.
Following this, portfolio investors quickly returned, pouring billions of dollars into Egypt’s local debt. However, the focus is shifting to winning a steady stream of foreign direct investment by offloading a selection of state-owned assets — a key IMF-backed reform, Bloomberg said.
The UAE kickstarted Egypt’s bailout with a $35 billion investment deal that included development rights for a prime spot in the Mediterranean headland named Ras El-Hekma. Now, the government says it’s seeking to replicate that pact and has earmarked five areas on the Red Sea coastline to offer to investors.
In August, an IMF report said that Egypt’s economy is showing signs of recovery, as the government’s recent efforts to restore macroeconomic stability have started to yield positive results. The report said that, at the time, the inflation rate in Egypt remained elevated but was coming down.
The country has been implementing several economic reforms to maintain fiscal stability, which includes the unification of the official and parallel exchange rates in March.