Saudi Investment Fund acquires minority stake in 4 Egyptian companies in $1.3B deal

CAIRO - 10 August 2022: The Sovereign Fund of Egypt (TSFE) announced Wednesday the completion of the acquisition of the Saudi Egyptian Investment Company, wholly owned by the Public Investment Fund (PIF), of state-owned minority stakes in four leading Egyptian companies listed on the Egyptian Stock Exchange, at a value of $1.3 billion.

 

The companies are Abu Qir Fertilizers Co., Misr Fertilizers Production Company (MOPCO), Alexandria Containers and Cargo Handling Co., and e-finance.

 

"This deal comes within the framework of the state's plan to expand the ownership base and encourage foreign direct investment," Hala El-Said, Egypt's Minister of Planning & Economic Development. Chairperson of The Sovereign Fund of Egypt.

 

 The deal also comes to support Egypt's sovereign fund strategy in attracting Arab and foreign investors and providing promising investment opportunities in various economic sectors.

 

El-Said added that this deal reflects the confidence of the foreign investor in the Egyptian economy, as it is one of the promising strategic markets that have many attractive investment opportunities.

 

This deal comes to activate the agreement between the Arab Republic of Egypt and the Kingdom of Saudi Arabia that was signed last June regarding the investment of the Saudi Public Investment Fund in Egypt in cooperation with TSFE and to enhance economic relations between the Arab Republic of Egypt and the Kingdom of Saudi Arabia.

 

 

On Tuesday, The Saudi Egyptian Investment Company, a subsidiary of the Saudi Public Investment Fund, agreed to buy 25 percent of the shares of the Misr Fertilizer Production Company (MOPCO) at a premium price of 25 percent over the stock price on the stock exchange, according to the Eastern Economy website which quoted a government official, who requested anonymity.

 

MOPCO’s share ended trading on the Egyptian Stock Exchange (EGX), Monday, at LE 104.89, down 0.6 percent, bringing the company's market value to about LE 24 billion, while its capital is LE 2.291 billion, distributed among 229.117 million shares, with a nominal value of LE 10 per share.

 

The Saudi sovereign fund will acquire stakes owned by the Ministry of Finance, the National Investment Bank, Gasco and Misr Life Insurance in the company.

 

 

 

 

At the end of March 2022, Egypt and Saudi Arabia signed an agreement in this regard, and the Egyptian Cabinet indicated at the time that it was targeting investments of $10 billion in cooperation between Egypt's Sovereign Fund and the Saudi Public Investment Fund.

 

The net assets of the Public Investment Fund amount to $620 billion, according to the latest data of the Institute of Sovereign Funds, and it is ranked sixth in the world, while the Kingdom aims to reach 10 trillion riyals.

 

Mopco, owned by the Egyptian government, was established in 1998 and specializes in the production of fertilizers, ammonia and nitrogen. The company's profits jumped to LE 2.08 billion in the first quarter of 2022, compared to LE 792.7 million a year earlier, while revenues increased by 111.5 percent during the same period to LE 4.21 billion.

 

MOPCO is one of the largest exporters of urea in Egypt, producing about two million tons annually, and is exported to Europe, Latin America, Asia and Africa.