Israeli media have claimed that Egypt is experiencing an economic downturn that forced it to sell about 10% of its telecommunications company after it pledged to the International Monetary Fund to reduce government intervention.
Israeli news site Bahdri Haredim reported that Egypt’s finance ministry announced the sale of a 9.5% stake in state-owned Telecom Egypt for 3.75 billion Egyptian pounds ($122.4 million) to advance the government’s privatization plan.
The company said on Sunday that 162.2 million shares were sold at 23.11 Egyptian pounds ($0.75) per share, 3.11 times the subscription price, and that another 0.5% of the shares were offered to employees. Telecom Egypt until May 25th.
Last February, Egyptian Prime Minister Mostafa Madbouly unveiled a list of more than 30 state-owned companies to be sold to investors within a year, state media reported, adding that the companies included a water production and bottling company and an oil company. Watania. company.
On April 29, Madbouli promised to go ahead with the sale plan and sell $2 billion worth of assets by the end of June.
The Hebrew website says Telecom Egypt is the second sale of state-owned assets since then, and the sale comes at a time when Egypt is desperate for privatization proceeds to face a series of debts due to be repaid in the coming months. .
The Hebrew website added that the announcement of the sale came after Egypt promised the International Monetary Fund (IMF) to reduce the country’s involvement in the economy and give private companies a much larger role as part of a $3 billion bailout package signed in December. . He also agreed to switch to a flexible exchange rate and slow down public investment in national projects slightly.
The aid package was rolled out within 46 months and will give the Egyptian government immediate access to nearly $347 million to help the heavily indebted country improve its balance of payments and budget.
An Israeli website says Egypt’s economy has been hit hard by rising oil and food prices following the coronavirus outbreak and the war in Ukraine, with the Egyptian pound falling more than 13% to a new low of over 32 against the dollar in January of this year compared to March. 2022.
The site claimed that about a third of Egypt’s 104 million people live in poverty, according to government figures, and many Egyptians depend on the government to ensure access to basic goods through subsidies and social solidarity programs.
Egyptian Commercial Law Professor Ahmed Said Responds to Israel’s Accusations
For his part, Ahmed Saeed, a professor of commercial law in Egypt, commented on Israel’s accusations, explaining that they are unfounded and that they represent a right that is patently false, adding that Egypt has a clear policy on large projects and has announced a specific exit plan for projects unequivocally or Ambiguity, noting that this plan was published prior to the agreement with the International Monetary Fund, and the goal is to involve the private sector in projects, and not to comply with the conditions of the International Monetary Fund.
In statements to RT, he indicated that the purpose of announcing the exit plan is to reassure investors, especially foreigners, that the state is working to create the right environment for investment, following repeated complaints from these investors that large projects are state-dominated and that they are produced and sold. at cost, which deprives investors of competition, and then the state saw that it was necessary to improve work and the investment climate.
The Egyptian expert pointed out that there are three types of projects: projects from which the state will withdraw forever, such as projects for food factories and oils, projects from which they will partially withdraw, and projects from which the state will not withdraw at all. due to their relationship to national security, such as the railroads and communications sector, to ensure that any investor monopolizes services that affect a wide range of citizens.
The economist was surprised by Israeli media reports that the sale of ten percent of Telecom Egypt’s shares was evidence of a recession in the economy, disproving this lie, saying that the sale of this stake would only bring an estimated profit of $150 million. and it will have no effect on Egypt’s debt, which is estimated at $26 billion.
In conclusion, he said that the purpose of the exit is not to comply with the requirements of the International Monetary Fund, but to improve the investment environment.
Source: Israeli media