In his first press conference since his appointment as minister of public enterprise two months ago, Hisham Tawfik on Monday revealed the main features of the ministry's plan to revamp and sell a number of its subsidiaries. Egypt's public sector includes 121 companies in different areas affiliated to eight holding companies with 210,000 employees. These state-owned companies are governed by Law 203/1991 which also regulates companies slated for privatisation. In his meeting with the press, the minister shed light on the poor financial performance of the companies, which has translated into losses amounting to LE7.5 billion, 90 per cent of which are shouldered by only 26 companies. The sector also has debts and unpaid energy bills topping LE15 billion, Tawfik said. He announced the main features of a turnaround plan, saying that feasibility studies would be conducted on loss-making companies on a case-by-case basis to decide whether they could be fixed. Companies seen as unfixable would be liquidated and their workers compensated, Tawfik said. He has recently said that this might be the case with the heavily indebted and loss-making National Cement Company as feasibility studies have indicated that it cannot be rescued. Companies which show potential will be restructured through overhaul plans to return them to making profits within a 24 to 30-month period. The minister said he saw high potential in both the textiles and steel sectors. The ministry's plan to develop the Holding Company for Spinning and Weaving includes divesting land parcels owned by its affiliates worth LE27 billion after they are rezoned from industrial to real estate purposes to fund the development of the spinning and weaving companies. In addition to importing modern machines, the ministry plans to repair older ones and close 14 others that have proved to be irreparable. It is currently working with the Ministry of Agriculture to cultivate 10,000 acres of short cotton in cooperation with the public and private sectors and the Egyptian armed forces, Tawfik told the Al-Mal daily. Regarding the steel industry, Tawfik also sees potential since the state has some LE4-5 billion in scrap metal stock that will be sold to develop the sector. Tawfik said the five companies included in the first phase of the government's new privatisation programme would be put on the block before the end of 2018. The offer price of the five companies selling additional stakes on the stock market would be set within 10 per cent of the trailing market average, he said. The Alexandria Minerals and Oil Company (AMOC) is expected to pilot the first wave of the privatisation programme next month, followed by the Eastern Company, the Heliopolis Housing Company, Abu Qir Fertilisers, and the Alexandria Containers and Cargo Handling Company before the end of the year. The second phase, to start in 2019, will see public companies floating shares on the bourse for the first time, among them the energy contractor Enppi.
