The Investment Ministry and International Cooperation is seeking to attract indirect investment to Egypt through the Initial Public Offerings program, which is conducted under the supervision of the Ministry. It covers a period of three to five years, aiming at offering partial stakes in some state-owned companies on the Stock Exchange. It will serve as a main tool to attract local and foreign capital flows to Egypt.
In this context, the Ministry of Investment contracted with NI Capital, the investment arm of the National Investment Bank (NIB) that is affiliated to the Ministry of Planning, to act as an adviser to the Ministry in the preparation of the IPOs program. This will include offering capital stakes in some state-owned companies on the Egyptian Stock Exchange and international stock exchanges. The program will be supervised by a committee comprising the Minister of Finance, the Minister of Investment and International Cooperation, and the Deputy Governor of the Central Bank. This will effectuate the state's plans to develop investments and to revitalize the capital market and the Egyptian Stock Exchange.
The program is part of the state's plan to diversify investment sources and advance the economic growth rates, by attracting local and international indirect investments estimated at USD 10 billion over three to five years. The IPO program also aims at expanding the ownership base of the state-owned companies, as well as improving the candidate companies' performance and promoting transparency and corporate governance, besides diversifying their resources. Moreover, the IPO program aims at developing and reviving the capital flows movement and trading activity on the Egyptian Stock Exchange. It also seeks to increase the market capitalization, in order to attract more retail investors, through the allocation of a share of the public offering to individual investors. In addition, the program targets adding new attractive investment opportunities to the market, that is to encourage domestic and international investors to participate in the IPOs. The petroleum and the banking sectors' companies top the list of candidate companies. The status of the candidate companies are under study.
Under the contract signed between the Ministry and NI Capital, the latter shall provide its advisory service over two phases. The initial setup phase, which takes about a month, includes cooperation with local and international investment banks to prepare an initial list of ten candidate companies in the petroleum and petrochemicals sectors. The offering prioritization criteria and proposed structure will be determined for each offering including the possibility of dual listing on international stock exchanges, together with the Egyptian stock Exchange, and recommend the best offering timing after studying the market and the attractiveness of these companies to local and international investors. Accordingly, the final list will be determined, including the order of companies offerings, in accordance with local and international investment banks recommendations.
During the second phase, lead managers and book runners will be appointed for each candidate company, according to the proposed timetable during phase one. Local and international legal advisers and auditors will be appointed to complete all the requirements necessary for the preparation of the companies to be selected for the IPO.