The Egyptian Asset Management Program By Muhammad Hassouna 2013

1. The Egyptian Asset Management Program By Muhammad Hassouna 2013

2. Egyptian Asset Management Program Goal Increase efficiency of the Projects owned by the Government as well as increasing its competitiveness

3. Privatization Techniques: Case of Egypt Sale through Stock Market (discontinued since 2009) Sale to Anchor or Strategic Investor (disc. Since 2009) Sale of comp assets/lines as separate Units (disc. Since 2009) Sale to the Employees (discontinued since 2005) Leasing Management Contracts Mass privatization (aborted in 2009)

4. Sales/Privatization Figures 2004-2010

5. Sectors that Attracted non-Egyptian Anchor Investors since 1991 Anchor Investor Transactions involving non-Egyptian buyers American British French Greek Portugese Italian Beverages and boilers, banks Cement Cement, Tyres, Gypsum and banking, Banks Bricks, and refractories, banks Cement Cement,, banks

6. Sectors that Attracted non-Egyptian Anchor Investors since 1991 Cont’d Anchor Investor Transactions involving non-Egyptian buyers Korean Mexican German Belgian Indian Textiles Cement Fertilizers and shipbuilding Chemicals Resins and textiles Food industries, construction and housing, hotels and seed production, banks, real estate, dept stores Arabs

8. Restructuring and Investment Settlement of 32.5 Billion of debt owed by Law 203 public enterprises to state-owned banks (Misr, NBE, Cairo and ex-BOA) since 2006 Interest expense saved reaches LE 3.5 Billion annually. Investment in law 203 affiliates (overhauls, renewal..etc) reached LE 25 bill for the last 8 yrs, including LE 6 bill in last 2 yrs (2011/2012) In 2003 the net result of Law 203 affiliates was a loss of LE 1.3 bill, converted to a stream of increasing profits ever since. Total profits of law 203 portfolio since July 2004 reached LE 20 Billion (average of net profits of LE 3.5 billion annually). This is compared to profits over 13 years (1991 till 2003) of LE 6 billion only in total.

9. Main challenges addressed by current government • Transitional period with the government aiming at steering the economy towards recovery to be followed by faster pace of sustainable growth in time with the next elections (mid 2014). • Rising social and labor demands. • Privatized companies returning to state-ownership. • Overall stability internally and regionally. • Economic conditions and sovereign ratings and international perception.

10. Opportunities in Public Enterprises • Possible strategic alliances between investors and public enterprises to carry on new projects (industrial, service sector …etc). Establishing new joint venture companies or SPVs has been a successful technique. • Partnership with private sector in restructuring public enterprises (eg. Department stores, hotels ...etc) including renovations, through leasing or management contracts.

11. Opportunities in Public Enterprises • Strategic partnership to utilize vast pieces of land in prime locations all over Egypt for industrial purposes or touristic projects according to its license. • Co-financing expansions in public enterprises (eg. fertilizers sector)

12. THANK YOU! WWW.INVESTMENT.GOV.EG mhasouna@investment.gov.eg PHONE: +2 02 24055628 +201222153214