Flotation of state petroleum companies will help increase production

CAIRO – 21 March 2018: Offering shares in state petroleum companies on the Egyptian Exchange (EGX) will create revenues for these companies that would enable them expand capacities and boost production, former deputy head of the Egyptian General Petroleum Corporation (EGPC) Medhat Youssef said Wednesday.

He said that the Egyptian government has agreed with the International Monetary Fund (IMF) to increase the private sector’s contribution in investment projects to curb the state’s reliance on foreign borrowing to establish projects.

Youssef added that the timing of the offering is “good” in light of a booming stock market, with the benchmark index EGX30 reaching 17,000 points for the first time in the EGX’s history.

He further said that the recent discoveries in Egypt’s oil and gas sector would encourage individuals and companies to buy shares in the state petroleum companies.
Egypt selected 23 state companies for the first phase of the state IPO program, with total shares value of LE 80 billion, the Finance Ministry said Sunday.

Market value of the companies stands at LE 430 billion, the ministry said, adding that the government intends to float about 15-30 percent of the companies in the EGX.

The program is expected to be implemented in a period that ranges between 24-30 months.

This comes as part of the state program to float some state-owned companies on the Egyptian Exchange under a five-year program announced in 2016 to attract investment and invigorate the stock market.

The first phase of the program will include five companies in the petroleum sector, including Enppi, Assiut Oil Refining Co (ASORC) and Alexandria Mineral Oils Company (AMOC) and six companies in the petrochemicals sector, including Sidi Kerir Petrochemicals Co and the Egyptian Ethylene And Derivatives Company.