In an unprecedented move by the government, the amendment of the public business sector law (Law no. 203) will start within the next few days.
The amendment will target increasing the capital of the Food Industries Holding Company by EGP 3bn-EGP 4bn, Minister of Supply Khaled Hanafy told Daily News Egypt on Monday.
On the sidelines of the Investors’ Summit organised by the Egyptian Stock Exchange (EGX), Hanafy said this move would pave the way for stock market issuance.
A source from the Food Industries Holding Company said the Ministry of Supply has submitted a proposal to the cabinet, demanding a legislative amendment to the public business sector law. This would allow the government holding companies to increase capital through the stock market, to fund their future expansion.
However, Head of the Egyptian Financial Supervisory Authority (EFSA) Sherif Sami told Daily News Egypt it is “illegal”, and it needs legislative amendment for a holding company to launch stocks on the stock market.
“The question is whether the launch will drive an economic growth,” Sami said.
Hanafy has stressed there is no timeframe for the launch, and that they will study the regulations and laws beforehand.
The public business sector law (no.203) prevents funding of public business sector companies except through the Ministry of Finance and the National Investment Bank.