CAIRO (Reuters) - The Egyptian military is turning to the country's newly created sovereign wealth fund to attract private investors to buy stakes in some of its assets and companies, the two organisations said on Monday.
The military controls dozens of companies, ranging from agriculture and industry to services and mining, through several entities, including the National Service Projects Organisation (NSPO).
The NSPO agreed with the Sovereign Fund of Egypt on Monday to help it prepare the assets of its companies for sale and to promote them, the fund's CEO Ayman Soliman told reporters at a signing ceremony at the council of ministers.
Up to 100% of the shares of some NSPO companies could be floated on the exchange, Soliman said. The fund itself may take stakes in the companies as well.
"The agreement will see the fund promoting and co-investing with private investors in agreed on, investable assets and companies owned by the NSPO to increase private sector participation in the NSPO's asset base," the fund said in a statement.
The agreement is in line with President Abdel-Fattah al-Sisi's instructions to float military companies on the stock exchange, Planning Minister Hala al-Saeed told reporters. The companies would be open to local and foreign investment.
Sisi, speaking in October at the inauguration of two army chemical factories, said companies owned by the military must be allowed to sell shares on the stock exchange. He said in 2018 that Egypt planned to offer shares on the stock market of a $1.1 billion cement plant owned by the military.
Critics complain that the expansion of the military into the economy over recent years represents unfair competition and is deterring private investment.
The Sovereign Fund of Egypt, set up last year, said it aims to cherry-pick some of Egypt's most promising state assets and bring in private investors to develop them. Sisi said its capital could be increased to as much as several trillion Egyptian pounds.