A United Arab Emirates investment firm bought a 30% stake in Egypt’s largest tobacco firm for $625 million, the latest step in the North African nation’s ambitious program to offload state assets and raise sorely-needed foreign currency.
The UAE firm, identified by Egypt’s cabinet as Global Investment Holding Ltd., will also provide Eastern Company with $150 million for the purchase of raw materials for manufacturing, the Egyptian government said in an Arabic-language statement on its Facebook page. It gave no further details about the investor.
The deal follows an announcement in July that Egypt had reached agreements with investors that included Abu Dhabi wealth fund ADQ to sell stakes in a number of companies for a total of $1.9 billion.
Read More: Egypt Surprises With Rate Hike Even as Devaluation Delayed (3)
The Egyptian program, which groups more than 30 state-held or state-affiliated companies, is a cornerstone of the country’s efforts to draw in the cash to solve a foreign-exchange crunch and clear the way for a long-delayed review of its $3 billion program with the International Monetary Fund.
Under the terms of the deal, the state-run Chemical Industries Holding Co. will retain a stake of almost 21% in Eastern Co. Prior to the sale, it held about a 51% stake.
Eastern said earlier Sunday it was ramping up output of its products by 15% to meet demand amid complaints by consumers about routine shortages of some brands. The company’s shares rose 9.6% in the past five days and 21% in the previous 30 days, according to data compiled by Bloomberg.
Author: Tarek El-Tablawy and Abdel Latif Wahba
