By Paul Kelechi
Egypt plans to list three of its state petroleum companies on the Cairo and Alexander Stock Exchange in the second half of 2015.
If it happens, it will be the second time in 10 years that a state hydrocarbon company has gone to raise money in the stock market.
Initial Public Offerings (IPOs) for Middle East Oil Refinery (MIDOR), the joint stock company; Gas Cool, the state company for refrigeration by natural gas and PetroNeel, the joint stock petroleum marketing company, are expected to pull in more than $1.11Billion (or LE8.5 billion in the Egyptian currency).
Of the three, the IPO for MIDOR is the core; it is planning to raise $1.098Billion (LE 8.38Billion) on Africa’s second largest bourse.
Gas Cool and PetroNeel hope to raise $16.4Million (LE125.5Million) and $6.55Million (LE 50Million) respectively.
2005 was the last time that the Arab Republic of Egypt listed any of its companies on the stock exchange. In that year, Sidi Kerir Petrochemicals and Alexandria Mineral Oils Company offered shares.
Egypt’s new government has been pursuing pro-market policies in the oil and gas sector, including payments of long accumulated debts to exploration and production firms and removal of subsidies on petroleum products.
Listing state-owned petroleum companies takes things further. Although it’s not clear if the state will entirely cede control, but the government has expressed the hope that partnership with the private sector will quicken restructuring of these companies for efficiency and profitability.