(MENAFN- Daily News Egypt) The sale of Egypt's microfinance provider Tamweely to an international consortium of investors marks a significant step in the Egyptian government's strategy to attract foreign direct investment and encourage private sector participation in the economy, according to Rania Al-Mashat, the Minister of Planning, Economic Development, and International Cooperation.
The deal, announced Sunday at a signing ceremony attended by Minister of Investment and Foreign Trade Hassan El-Khatib, saw 100% of the shares of Tamweely, owned by NI Capital and Ayady, subsidiaries of the National Investment bank and the Post for Investment, transferred to a consortium of international investors.
The consortium includes the European Bank for Reconstruction and Development (EBRD), the British International Investment (BII), and SPE Capital and Tamweely Capital Ventures (TCV), both private equity funds. The transaction, which exceeded EGP 2.5bn, marked Post for Investment's (PFI) first successful exit since its inception in 2006. PFI, a founding shareholder in Tamweely since 2017, held a 30% stake in the company.
“Today, we witness a significant step towards developing the microfinance sector and increasing financial inclusion, as micro-enterprises play a crucial role in achieving comprehensive development by supporting economic growth and providing job opportunities,” said Al-Mashat.“With approximately 3.4 million private sector enterprises in Egypt, about 98% of which are micro, small, and medium-sized businesses, according to the Central Agency for Public Mobilization and Statistics.”
Al-Mashat highlighted that the transaction represents a practical application of efforts to govern economic activities and implement the State Ownership Policy Document.“Today, we are witnessing a strategic divestment of a group of government companies, NI Capital and Ayady, subsidiaries of the National Investment Bank, as well as Post For Investment, from“Tamweely” Microfinance in favour of a consortium of international investors,” she said.
She emphasised that the transaction underscores the important role of development partners in supporting and developing the private sector in Egypt.“This transaction strengthens the role of development partners in supporting and developing the private sector in Egypt, with total investments and financing by partners amounting to $11bn since 2020,” she said.
Al-Mashat also highlighted the Ministry's efforts to bridge information gaps and maximise the benefits from development partners.
“In light of the State's vision to encourage private sector contribution to development and maximise its benefits from development partners by bridging information gaps, the Ministry launched the Hub for Advisory, Finance & Investment for Enterprises platform,” she said.
This electronic platform provides comprehensive information on financing tools offered by development partners, such as direct investment, commercial financing, credit, or risk guarantees, which directly contribute to increasing the competitiveness of Egyptian companies and their expansion capabilities. The platform offers more than 85 financial or technical support services, in addition to hundreds of tenders and initiatives funded by development partners.
“This transaction is a milestone in PFI's transformation from an Investment holding company into a major active investor in the Egyptian market,” said Ahmed Ali Abdelrahman, CEO and Managing Director of PFI.“It also highlights the role that PFI plays in leveraging Egypt Post's assets, such as its network of over 4,500 branches, its unique customer base and its unparalleled brand equity in the minds of all segments of the Egyptian society. This transaction also demonstrates the exceptional business model of PFI that allows it to make and manage investments that maximise our shareholder's return while also creating a tangible social impact.”
Gamal Guemeih, Chief Investment Officer of PFI, said:“We are proud to have negotiated and concluded this transaction in cooperation with the team at NI Capital. This exit is in line with our newly adopted investment strategy that primarily focuses on holding controlling stakes in Financial and Logistical Services, capitalising on Egypt Post's legacy in both sectors. The proceeds will help fund our ambitious pipeline and will be reinvested in multiple opportunities over the coming year.”
The sellers were advised by ADSERO-Ragy Soliman & Partners (legal advisor). The investment consortium was advised by MF Strategy, Mediterranean Corporate Finance (MCF), Helmy, Hamza and Partners – a member firm of Baker & McKenzie International, and BLC Robert & Associates (legal advisors), PricewaterhouseCoopers (financial advisor), IBIS Consulting (ESG and Impact), and various other consultants on commercial and technical matters.
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