Telecom Egypt IPO on track as lead-bank appointed

Egypt is seeking to create investment opportunities to attract and retain funds generated regionally by high oil prices in the petroleum-producing nations of the Middle East and North Africa.

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By  Tawanda Chihota Published  August 8, 2005

CSFB has beaten nine other banks to the contract to manage the sale of a stake in Egyptian state fixed-line incumbent Telecom Egypt. The divestment is forecast to raise up to US$1 billion, given that the telco is the largest fixed-line company by subscribers in the Middle East and North African region, with 10 million subscribers. The government is planning to sell 10 to 20% of the telco in early December, company chairman Akil Beshir said. Egypt is seeking to create investment opportunities to attract and retain funds generated regionally by high oil prices in the petroleum-producing nations of the Middle East and North Africa. The sale of the Telecom Egypt stake will be conducted through an initial public offering in Egypt possibly coupled with Global Depositary Receipts to be traded in London and Gulf cities. The government has plans to boost fixed-line penetration in the country of 72 million to 25% by 2010, from less than 14% currently. Telecom Egypt reported annual revenue of 7.7 billion Egyptian pounds (US$1.3 billion) in 2004, up 7.9% year on year, as the number of its subscribers grew by 8% to 9.5 million. Net profit increased by 30% to 1.4 billion Egyptian pounds. Telecom Egypt's monopoly on fixed-line international calls is scheduled to end in 2006, with the government planning to open the international fixed voice market by that time. A third GSM licence is also set to be auctioned in Egypt next month. Telecom Egypt currently holds a 25.5% stake in Vodafone Egypt, one of the two incumbent mobile operators.

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