June 15, 2017 / 3:40 PM / 2 years ago

UPDATE 1-Egypt to sell shares in engineering group ENPPI

(Adds details and background)

By Ehab Farouk

CAIRO, June 15 (Reuters) - Egypt plans to embark on its first sale of shares in a state-owned company in 12 years, aiming to raise up to $150 million from a stock market listing of Engineering for the Petroleum and Process Industries (ENPPI) in the first of a series of public offerings.

State investment bank NI Capital expects to offer shares in ENPPI before the end of this year, the bank’s Chief Executive Officer Ashraf Ghazaly told Reuters in an interview on Thursday.

NI Capital expects to raise between $100-150 million from the ENPPI sale, Ghazaly said.

“Our target is for ENPPI to be ready for offering on Egypt’s bourse before the end of this year,” he said.

Privately managed NI Capital is part of the country’s National Investment Bank and acts as a consulting authority for the government and manages government investment funds.

The government’s IPO programme, which will take place over three to five years, will include dozens of state-owned companies. Ghazaly said these would include companies from the petroleum, services, chemicals, shipping, maritime and real estate sectors.

IPOs managed by NI Capital will offer no more than 24 percent of the shares of the state-owned companies, he said.

Egypt expects to raise 5-7 billion Egyptian pounds ($276-$387 million) through state-owned company IPOs during the 2017-2018 fiscal year beginning in July, deputy finance minister Ahmed Kouchouk told Reuters last month.

The state owns vast swathes of the economy, including at least three of the country’s largest banks along with much of its oil industry and also big chunks of real estate.

Egypt’s economy has been struggling to recover since a popular uprising in 2011 drove foreign investors and tourists away, but the government hopes a $12 billion International Monetary Fund lending programme signed at the end of last year will put it on the road to recovery.

“I’m convinced that the current time is suitable for IPOs to gain investors’ confidence in the Egyptian market. The Central Bank’s decision to cancel caps on foreign transactions will increase that confidence and help us attract more foreign investors,” Ghazaly said.

Egypt’s central bank on Wednesday removed limits on international currency transfers, scrapping a $100,000 monthly limit on individual bank transactions in a long-awaited reform intended to attract badly needed foreign investment.

The last time state-owned companies were listed on the exchange was in 2005 when shares were floated in Telecom Egypt and oil companies Sidi Kerir Petrochemicals and AMOC. (Reporting by Ehab Farouk; Writing by Amina Ismail and Arwa Gaballa; Editing by Giles Elgood and Jane Merriman)

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