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Aramco IPO Becomes Factor in Timing of Egypt’s Own Share Offers

Egypt says banks advising on its own sales of stakes in state firms are urging it to take listing of Saudi Aramco into account.

Aramco IPO Becomes Factor in Timing of Egypt’s Own Share Offers
Crude oil storage tanks stand in the Juaymah tank farm at Saudi Aramco’s Ras Tanura oil refinery and terminal at Ras Tanura, Saudi Arabia. (Photographer: Simon Dawson/Bloomberg)

(Bloomberg) -- What’s set to be the world’s biggest IPO is already causing ripples across the Red Sea.

Egypt government says banks advising on its own long-awaited sales of stakes in state companies are urging it to take the looming listing of Saudi Arabia’s Aramco into account. That could mean a shift in the North African nation’s plans to raise about 80 billion pounds ($4.95 billion) from all its offers and bring in much-needed foreign investment.

Aramco hasn’t given a date for its IPO, but Al Arabiya TV reported this week the oil giant will start trading on Saudi’s stock exchange Dec. 11.

“Aramco is the biggest IPO in the world and we should take it into consideration when deciding the timing of our offerings,” Public Enterprise Minister Hisham Tawfik said in an interview. “This is the message we got from the investment banks.”

While Abou Kir Fertilizers & Chemical Industries and Alexandria Container & Cargo Handling are both almost ready to sell stakes, Tawfik said authorities will meet advisers “soon” to discuss the timing. He didn’t specify whether that could mean bringing forward the sales to before the reported date of Aramco’s offering, or pushing them further back.

Broader Plans

NI Capital, the government’s investment bank and adviser on the sales, said EFG-Hermes Holding Co. and Citigroup Inc. are managing Alexandria Container & Cargo’s offering. CI Capital & Renaissance Capital are managing Abou Kir.

Egypt has been planning the offering of ownership in government-run entities as part of a broader effort to turn around bloated public-sector companies. Officials seek to offer stakes ranging from 15%-30% in more than 20 firms in sectors including petrochemicals, oil, finance and real estate.

After several delays, the government kicked off the program with an additional 4.5% stake sale in tobacco monopoly, Eastern Co. Abou Kir and Alexandria Container & Cargo are next in line.

Earlier plans to offer the companies were pushed back for various reasons, including the lackluster performance of one private company’s IPO, as well as a general downturn in the investment climate.

Tawfik also said a sale of part of the government’s stake in property developer Heliopolis Housing is expected to be ready in the first quarter of 2020. Current shareholders have approved handing over management to a strategic investor that takes a 10% stake from the 22%-25% it will offer, he said.

To contact the reporter on this story: Mirette Magdy in Cairo at mmagdy1@bloomberg.net

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Michael Gunn, Tarek El-Tablawy

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