CAIRO (Reuters) -Egypt will offer stakes in military-owned companies through its sovereign wealth fund, the cabinet said on Wednesday, seeking to meet the requirements of the International Monetary Fund to expand the private sector’s role in the economy.
The wealth fund will aim to sell stakes in fuel station operators Wataniya Petroleum and Chillout, mineral water company Safi, Silo Foods, and the National Company for road building this year and next, the cabinet said.
It did not give the size of the stakes to be sold, which will follow a restructuring of the companies by the $12 billion wealth fund.
Financial services companies EFG Hermes Holdings and CI Capital will promote and underwrite the offerings, the cabinet added.
Dozens of military-owned companies have flourished since Abdel Fattah al-Sisi, a former armed forces chief, became president in 2014, a year after leading the military in ousting Islamist President Mohamed Mursi.
This has raised concerns among local businesses and foreign investors about potentially unfair competition. The government says there is a level playing field for private companies and military-backed firms fill gaps in the market.
The IMF has made increasing the role of the private sector in the economy a requirement of an expanded $8 billion loan.
The wealth fund will also offer in July old government buildings in the downtown Cairo area for investors to develop with the government, Prime Minister Mostafa Madbouly said at a press conference.
Last year, the fund started preparing a plan to revamp Cairo’s historic centre after government ministries moved to a new administrative capital to the east.
The area, modelled on Paris in the 1860s, is filled with elegant but crumbling buildings. Many were nationalised in the 1950s and 1960s and left in disrepair.
Madbouly also said the world was seeing “a full global economic and trade war” after the tariffs imposed by the United States.
The wealth fund was established in 2018 with the aim of fostering private sector partnerships and attracting foreign investment to state-owned companies. The government and military were previously hesitant to relinquish control over some assets.
However, the government has lately been trying to expedite the programme, seeking to sell stakes in at least 10 companies in 2025, including two military-owned ones.
(Reporting by Momen Saeed Atallah and Jana Choukeir. Writing by Tala Ramadan, Nayera Abdallah and Mohamed Ezz. Editing by Louise Heavens, Ed Osmond and Mark Potter)
