Cairo Some Emirati companies are entering a new round to gain investment opportunities in Egypt by acquiring state-affiliated companies and others in the private sector.
This trend proves that the country has turned into a safe haven for many capitals seeking growth and profit at the same time, amid geopolitical changes taking place in the world that are making the economy strong.
The Sixth of October Development and Investment Company (SODIC), which operates in the residential sector by its new owners, Aldar Real Estate Company and the State Investment Holding Company (ADQ), which is affiliated to the Abu Dhabi Sovereign Fund, tries Madinet obtain. Nasr for Housing and Development.
Through this process, the UAE shareholders want to expand their presence in the local market.
SODIC made an offer to acquire about 100 percent of the property owned by the Egyptian government by about 22 percent, in a cash transaction that would bring the value of Madinet Nasr Housing Company to about $ 338 million.
Muhammad Junaidy: This wave aims to expand and improve job creation
Through this transaction, SODIC aims to expand the real estate market in Egypt and continue to maximize its portfolio of projects in this sector.
The expected transaction will contribute to the support of its future expansion plans, particularly in the East Cairo market, to expand its customer base, leverage most of the strengths of both parties and the value of the combined undeveloped land portfolio, which 11 million squares are estimated, to maximize. meter.
The Emirati Aldar has announced that Madinet Nasr Housing Company is one of the most prominent real estate development companies in Egypt, as it owns large areas of land that offer excellent opportunities for expansion, in addition to its two groundbreaking projects, “Taj City” and “Saray”.
The UAE company Chimera has made an official offer to acquire Beltone Financial Holding, which is 70 percent owned by Orascom Investment.
The Financial Supervisory Authority has announced the submission of a mandatory takeover bid from Chimera Investment Company to acquire 90% of Beltone’s shares in a transaction bringing the total value of Beltone to approximately $ 36 million.
The companies targeted for acquisition are listed on the Egyptian Stock Exchange, and this news reinforces the revival of the capital market, which is suffering from a lack of liquidity and weak trading.
It also represents an incentive for investment funds and individuals to enter the market and buy shares, especially with the entry of new members to the boards that target future expansions and make profits.
The scenario of acquiring Egyptian companies has become the new investment instrument used by Emirati companies to support and sustain the Egyptian economy, replacing direct economic aid.
In addition, it improves the new scenario for the growth of the Egyptian economy, and brings many benefits to foreign companies investing in it.
Sovereign wealth funds and large companies in the UAE, Saudi Arabia and Qatar are currently following the investment route in Egypt, and Cairo does not care about it as there are no other options for it.
Wave investments increase Egypt’s opportunities to support the foreign exchange reserve in the Central Bank of Egypt and control the foreign exchange market, which ultimately reflects on the well – being of society, reducing inflation rates and improving the quality of life.
Acquisitions are a direct investment as they transfer expertise, management skills and new capital into key sectors, of which the real estate market is the most important, with the new requirements set for the establishment of real estate projects in Egypt.
Ayman Reda: Activating dispute resolution committees and attracting new investors
This Gulf scenario began in the country when “ADQ”, one of the sovereign funds of the Abu Dhabi government, acquired interests in 5 Egyptian companies last April in a deal worth about $ 1.9 billion.
These transactions were carried out at Commercial International Bank, Fawry for Technology, Misr Fertilizer Production Company, MOPCO, Abu Qir Fertilizers, and Alexandria Container Handling, where the government sold its interests in the first and second companies and part of its ownership in other companies.
The document, “State Ownership Policy,” details that the government will soon release, will increase private sector participation in public investment from 30 to 65 percent over the next three years, while maintaining growth of 7 percent or more for the Egyptian economy. . in the face of global challenges.
Mohamed Junaidi, head of the Industrial Investors Syndicate in Egypt, has strongly welcomed the Emirati and Gulf investments, as it improves jobs for young people, and aims to initiate new expansions and thus increase gross domestic product.
Within three years, the Egyptian government also plans to step out of 79 sectors, reducing its investments in 45 other sectors, in a way that contributes to making more room for the private sector, and attracting about $ 40 billion in direct investment. .
In an exclusive statement to Al-Arab, Junaidi added that the continued elimination of bureaucracy and the existence of encouraging legislation are the main factors that increase the chances of Gulf investments flowing into Egypt, especially in the consumer, real estate, tourism sectors . and agriculture, as well as the financing of infrastructure projects in Egypt.
Wave investment flows to Cairo reflect the success of government policies and plans in the economic reform program, which aims to raise growth rates, implement all legislative and procedural reforms, and develop infrastructure to provide an attractive environment for foreign investment.
Ayman Reda, secretary general of the Tenth of Ramadan Investors Association, East Cairo, said: “There is a determination by Egypt and its brothers from the Gulf countries to reach unprecedented levels of joint economic and commercial cooperation in the coming period. . ” In a statement to Al-Arab, he added: “This is evident from the strengthening of Saudi, Emirati and Qatari investments in the country.”
The deal contributes to supporting its future expansion plans, especially in the East Cairo market, increasing its customer base and making the most of the strengths of both parties
Reda called for the need to activate the joint committees involved in resolving disputes and problems facing Golf Investments in the Egyptian market, which are influencing the influx of new investors from the private sector and not just sovereign funds will support.
The importance of the expansion of Golf Investors in Egypt lies in the fact that it represents a basis for attracting other foreign investment, and paints a positive picture of the investment environment and climate in the country.
It is preferable that Gulf investments be directed to productive sectors such as agriculture and industry to increase Egyptian domestic production, which will contribute to increasing exports and replacing the imported product, which will reflect on the labor market and the foreign exchange reserve in the Central Bank.