EGYPT. Citadel Capital's Chairman Ahmed Heikal, whose private equity firm has more than US$9 billion in investments, sees “strong” interest from foreign investors in Egypt’s food, transport, and distribution companies.
“Egypt has more than 80 million citizens, they still need to eat,” Heikal, who is attending the World Economic Forum in Davos, Switzerland, told Bloomberg in an e-mailed response to questions.
“The businesses that serve them still need effective transport and logistics solutions. We still need domestic refining capacity. Household and industry alike still need to be hooked up to the natural gas distribution grid.”
Egypt’s foreign direct investment plunged to US$375.5 million in the first nine months of 2011 from US$5.7 billion a year earlier, according to the most recent central bank data.
Seven weeks of elections have failed to allay tensions between the activists who ousted President Hosni Mubarak and the military council that took power from him. Protesters are calling for mass rallies tomorrow, the anniversary of the start of the uprising.
Tourist arrivals fell 33% last year, while international reserves are at the lowest level since March 2005. Egypt formally requested a $3.2 billion loan from the International Monetary Fund on January 16 to help it support the economy.
Citadel Capital’s funds control companies investing in 15 countries including Egypt, Kenya, Sudan and South Africa in industries ranging from food to transport, mining, cement and energy.
The company raised 1.05 billion Egyptian pounds (US$173.9 million) in a capital increase from its regional co-investors last year. It also raised US$234 million in equity and debt for its railway investment in Kenya and Uganda, in addition to US$150 million from the U.S. Overseas Private Investment Co.
“Opportunities to create value as a private equity investor are still very much there, particularly when your investments are in the right side of macro trends,” Heikal said. “It is in sectors such as these that we see strong interest” from international private equity investors, he said.
Citadel Capital shares, listed in Cairo, gained 4.3% this year, trailing the 14.2% increase in Egypt’s benchmark EGX 30 Index.
The Cairo-based company said January 9 one of its funds agreed to sell its stake in National Petroleum Co. (9937) Egypt Ltd. to Calgary, Canada-based Sea Dragon Energy Inc. (SDX) for US$147.5 million.