Since Khaled Badawy took office as minister of public sector affairs in January, he focused on debt settlement and exploitation of unutilised assets.
Badawy worked on tackling four main portfolios in parallel. First, settling the debts of the sector’s companies, and second, restructuring financial and administrative subsidiaries. In addition, he worked on floating the ministry’s companies on the Egyptian Exchange, as well as solving the disputes of state companies.
The minister, who was the chief executive of Al Ahly Capital, started his ministerial duties by holding several meetings with the National Investment Bank to settle debts owed by the holding companies amounting to EGP 21bn. He also instructed the boards of directors of the holding companies to settle their indebtedness to electricity and gas companies, which reached EGP 15bn.
Badawy said that these debts negatively affected the financial positions of 123 companies belonging to eight holding companies, regulated by Law 203 on public sector companies.
The settlement will include the assignment of unused land to the National Investment Bank, while the debts of the electricity and gas companies will be scheduled.
During the five months he spent in the ministry, Badawy prepared a scenario for the restructuring of the companies through the exploitation of unutilised assets, especially land. He instructed the subsidiaries to list the total untapped assets to be used to settle debts and finance new projects.
The scenario identified three paths for the exploitation of assets, the first being direct selling, the second involved the private sector or a government agency, and the third developed by the company or sister companies.
Among the plans for the financial restructuring of the business sector, Badawy announced the agreement with the Ministry of Finance to float 10 of the ministry’s companies through a government IPO programme.
The ministry intends to partially float Misr Insurance and Misr Life Insurance on the EGX to start, followed by container handling companies, then other companies.
Among the reform plans for Badawy is to assign subsidiaries to use investment banks in restructuring plans and to contract with a number of international offices to prepare development studies.
Despite the reform decisions initiated by Badawy over the past months, the Ministry of Public Sector Affairs’ role remains unclear, especially as the government announced last March its plan to establish a sovereign fund to manage public sector companies in the near future.