Egypt to float shares in Suez Canal project

Egypt is relying on the sale of shares to investors to fund its multibillion-dollar Suez Canal Axis Development Project after regulations allowing for initial public offerings for projects under construction were introduced in February.

“This is an iconic IPO,” said Tariq Qaqish, the head of asset management at the Dubai-based investment bank Al Mal Capital. “Long-term investors who look at infrastructure themes will be delighted to access such an IPO if the price is right.”

Egypt’s president, Abdel-Fattah El Sisi, on Tuesday revealed plans to capitalise on the 145-year-old waterway by creating an industry and logistics hub in addition to the digging and construction of a new channel alongside the canal and tunnels for motor vehicles and trains.

The cost is expected to be at least US$4bn.

Five-hundred million shares in the project will be available to investors at a rate of $14 a share for Egyptians and $100 per share for foreigners, Mr El Sisi said at the inauguration of the project on Tuesday.

Egypt’s government in May signalled a policy shift would occur under the administration of Mr El Sisi and that ministries would take advantage of the regulations to raise funds needed for public-sector businesses and new infrastructure through the country’s stock exchange.