The sale comes as part of the country’s privatisation drive as it must meet a series of foreign debt obligations.
The ministry said on Sunday that 162.2 million shares were sold at 23.11 Egyptian pounds ($0.75) each in a subscription that was 3.11 times oversubscribed. Another 0.5 percent of the shares are now being offered to Telecom Egypt employees until May 25.
The two-part sale will reduce the government’s stake in Telecom Egypt to 70 percent from the previous 80 percent, with the other 20 percent floating on the Egyptian Exchange. Two local investment banks, CI Capital and Ahly Pharos, were managing the sale, according to market sources.
The ministry statement did not say what portion of the shares were sold to local buyers as opposed to non-Egyptians. Egypt has been looking to raise foreign currency through its asset sales.
Al Mal newspaper said on Thursday that Moon Capital, based in New York City, was among the bidders.
In February, Prime Minister Mostafa Madbouly disclosed a list of more than 30 state-owned companies to sell to investors within the year, state-run Ahram media reported, adding that these include the National Company for Producing and Bottling Water (Safi) and Wataniya Petroleum Company.
Madbouly promised on April 29 to press ahead with the sales programme and sell assets worth $2bn by the end of June. Telecom Egypt is the second sale of state assets since then.
The sale comes as Egypt desperately needs privatisation proceeds to meet a series of foreign debt obligations over the coming few months.
Sunday’s announcement comes after Egypt promised the International Monetary Fund (IMF) it would roll back the state’s involvement in the economy and allow private companies a much greater role as part of a $3bn financial support package signed in December. It also agreed to move to a flexible exchange rate and slow down public investment in national projects.
The package covers a period of 46 months and will give the Egyptian government immediate access to about $347m to help the debt-ridden nation bolster its balance of payments and budget.
The IMF stipulation that Egypt slow down public investments and privatise state assets came after the state poured billions of dollars into massive construction projects, such as the New Administrative Capital and New Alamein City, and into weapon purchases from countries like Germany and Italy. Meanwhile, Egypt’s external debt has quadrupled in the past decade.
Egypt’s economy has been hit hard by higher oil and food prices following the coronavirus pandemic and the war in Ukraine, with the Egyptian pound weakening by more than 13 percent to a new low above 32 to the United States dollar in January this year compared to March 2022.
About a third of Egypt’s 104 million people live in poverty, according to government figures, and many Egyptians depend on the government to keep basic goods affordable through state subsidies and other similar schemes.