The government is considering selling stakes in two listed companies, Misr Fertilizer Production Company (MOPCO) and Delta Sugar Company, as part of its divestment plan from some public enterprises, according to informed sources.
The sources, who spoke on condition of anonymity, told Daily News Egypt that the government is planning to sell stakes in these companies as investments that are close to exit and in which it owns direct shares. The sources said that there is interest from Abu Dhabi Developmental Holding, a sovereign investment fund, in acquiring a share of Delta Sugar, which could range between 20% and 25%.
Delta Sugar Company is one of the largest sugar producers in Egypt, with a market share of about 40%. The company’s main shareholder is the Egyptian Sugar and Integrated Industries Company, affiliated to Holding Company For Food Industries, which owns 55.73% of the company. The other shareholders include Misr Life Insurance (9.07%), Misr Insurance (8.29%), and Egyptian Chemical Industries – Kima (6.46%). Delta Sugar Company also owns stakes in Faiyum Sugar Works Company (26.8%) and Nobaria Sugar and Refining Company (30%).
The company’s shares closed up by more than 6% at the end of trading on Sunday, reaching EGP 47.73 per share. The company’s net profit doubled in the first half of this year to EGP 1.08bn, compared to EGP 544m in the same period last year. The company’s sales also increased by 41.1% to EGP 3.5bn in the first six months of this year.
The sources also revealed that the government is studying selling an additional stake from MOPCO that could reach 15% in the coming period, and that Abu Dhabi Developmental Holding is conducting preliminary negotiations. MOPCO is one of the largest fertilizer producers in Egypt, with a production capacity of about 2 million tons per year. The company’s main shareholders are Abu Dhabi Developmental Holding and the Saudi Public Investment Fund, which acquired stakes in MOPCO last year.
The sources confirmed that the government intends to sell stakes in three listed companies before the end of this year, in addition to Telecom Egypt and the Export Development Bank of Egypt. The sources added that the International Finance Corporation, which has been chosen as a consultant for the government IPO program, will qualify the companies for listing.
The government IPO program aims to increase the participation of the private sector in the economy and attract more investments by listing government companies on the stock exchange or selling stakes to strategic investors. The programme includes 32 government companies in 18 economic sectors, including three banks.
