Global Investment Holding Co. of the United Arab Emirates has acquired a 30 percent state in Eastern Co. of Egypt for EGP19.3 billion ($625 million), reports Ahram Online.
After the sale, the state-owned shareholder, Chemical Industries Holding Co. (CIHC), will retain a 20.9 percent stake in Eastern.
The deal is part of Egypt’s program to sell stakes in 35 state-owned companies to strategic investors by the end of June 2024.
Egypt’s minister of public enterprises, Mahmoud Esmat, said the deal underscores the government’s commitment to the success of its program to expand ownership and encourage direct private investment across various sectors.
In the first nine months of fiscal year 2022-2023 (which concluded in March), Eastern Co. had a domestic market share of more than 70 percent and reported a net profit of EGP5.29 billion, up 24 percent over the comparable period in the previous year.
The privatization program is part of Egypt’s commitments under a $3 billion loan from the International Monetary Fund.
The government announced wants to attract $5 billion from the offering of power plants and state-owned companies from October 2023 until the end of June 2024.
In related news, Eastern recently boosted its production by 40 percent to help alleviate a cigarette shortage in Egypt, according to The Egypt Independent.
The short supply had caused prices of popular brands such as Cleopatra to surge to unprecedented levels.
Following Eastern’s decision to increase output and step up vigilance against illicit sales, cigarette prices fell by EGP20, bringing the price of a pack to EGP40.
Eastern Company CEO Hani Aman announced that the company is working with various state agencies to ensure the proper supplies are being provided to the public.