Local investment banks are preparing reports to be presented to NI Capital, which is entrusted with preparing the government’s propositions plan, within days. The reports contain recommendations and suggestions on their vision for companies that the government did not select yet, according to closely related sources.
The sources said that when the government addressed investment banks about the propositions programme in the last week of September, it did not ask for feasibility studies for the oil companies that it intends to put forward or for an increase in the capital of the already-listed companies. NI Capital asked banks to provide recommendations on the readiness of companies and the best timing for implementation, as well as offering ratios, the sources added.
The sources pointed out that NI Capital has already selected companies in the oil and petrochemical sectors, next to offering Banque du Caire and the Arab African International Bank, noting that food industry and electricity companies are still under consideration by the government.
They added that the government is aware that the timing of the proposals in general will be a crucial factor in the success of the programme, because the market does not have the financial ability to cover more than one IPO at the same time under the low trading volumes which are lower than EGP 400m a day.
The sources stressed that NI Capital addressed all major investment banks, including EFG Hermes, CI Capital, Pharos, HC, Beltone Financial, and Cairo Capital.
Press reports indicated that the government is considering the conditions of 10 companies that would be put forward for the first time, including the Middle East Oil Refinery (MIDOR), the Egyptian Ethylene and Derivatives Company (ETHYDCO), Petrojet and ENPPI, in addition to increasing the capitals of already-listed companies such as Sidi Kerir Petrochemicals Company (Sidpec), Abu Qir Fertilizers and Chemicals Company (AFC), Alexandria Mineral Oils Company (AMOC), and Misr Fertilizers Production Company (MOPCO).
The government aimed to collect up to $10bn of the propositions programme, which includes several stages in its implementation. Each stage will include a package of companies to bridge the worsening deficit in the country’s budget.