Egypt revives IPO market with United Bank’s $110M stake sale

Egypt has taken a significant step in its privatization efforts by initiating the sale of a stake in United Bank, valued at up to $110 million. This marks the country’s first initial public offering (IPO) in three years and aligns with its privatization agenda, which has received backing from the International Monetary Fund (IMF).

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The offering involves a 30% stake in United Bank, which is currently almost entirely owned by Egypt’s central bank. According to a stock exchange filing reported by Bloomberg, the bank is offering 330 million shares at a maximum price of 16.5 Egyptian pounds per share. The sale has been structured in two distinct phases: a private placement of 313.5 million shares running from Wednesday through November 25, followed by a public offering of the remaining 5% between November 27 and December 3.

This initiative is part of a larger government strategy announced last year, which aims to privatize 32 state-owned assets across various sectors including banking, energy, and real estate. However, progress has been sluggish, with no major sales completed since Egypt’s currency devaluation in March. That devaluation was part of a broader $57 billion global bailout package, led jointly by the United Arab Emirates and the IMF.

United Bank’s financial position appears strong, with assets valued at 106 billion Egyptian pounds ($2.18 billion) as of June. The upcoming listing is anticipated to generate substantial investor interest and is expected to bolster the bank’s capital base as it operates in an increasingly competitive banking sector.

Here’s what it means for you:

1. This represents a new investment opportunity in Egypt’s banking sector.
2. It could signal more upcoming IPOs in Egypt, creating additional investment options.
3. Suggests Egypt is opening up more to private and foreign investment.

Source; Bloomberg, Business Insider.

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