Investment Minister Ashraf Salman has said the business sector is currently unready for stock market offerings, and that he prefers to revitalise companies through government restructuring programmes.
In a press conference held for CI Capital, Salman said the government is working to develop these companies “by subjecting them to reward and punishment programmes and holding those responsible accountable for managing the companies according to what is achieved in terms of value-added”.
According to the minister, the restructuring process is aimed at developing companies, whether via financial, technical, or administrative means.
There are eight holding companies in Egypt, including 125 subsidiaries of the Ministry of Investment, according to Salman.
Salman added that the government is working to bring transportation companies out of the red and help them generate profits. He also said that some companies that underwent reform programmes achieved sales growth between 17%-40% during the first quarter (Q1) of FY 2014/2015. Others achieved net profits representing a 30-35% increase over FY 2013/2014.
When asked how a drop in oil prices would affect the economic summit to be held in March, Salman said that the partnership between Egypt and the Gulf is “strategic”.
The price of oil fell to less than $50 per barrel at the beginning of this week.
According to Salman, the government has already prepared 28 projects and is working to complete another 14. He added that the government will not present all of these at the economic summit scheduled to be held at the beginning of March.
He said that the government has worked to study these projects through various investment banks, paying special attention to financial aspects.
The International Monetary Fund (IMF) delegation that visited Egypt in November 2014 recommended the government be cautious of expanding mega-projects.
Egypt financed the Suez Canal Axis Development project through offering investment certificates with a 12% yield.
Hazem Badran, head of investment banking at CI Capital, said that the company is working to create a link between investors in various fields and the government, in addition to marketing projects in various sectors.