My guest today sits in some of those rooms. He's a Board Director at Eastern Company, the blue-chip that launched Egypt's privatisation program back in 2019, and an international management and economics expert. Ahmed Elleissy Nassef, thank you very much for being with us today.
Thank you for having me.
Let's start with what Egypt wants to do. It wants to raise billions through EGX listings and stake sales this year. From inside a state company boardroom yourself — what has to be true before a company is genuinely ready to be sold to public investors?
Well, one of the things that has to be true is to understand the perspective of any public investor. The investor is not coming here to buy history — they're coming to buy the future, in terms of cash flow and governance discipline. A company is not ready simply because it has assets. It's ready when the investor can trust the numbers, the governance, the strategy, and the liquidity of what they're putting their money into. Any investor will look at things like audited financials that meet listed company standards, a credible board, and a clear separation between the company and the state as shareholder and regulator. Realistic valuation is extremely important, and there needs to be a free float large enough to trade meaningfully. The idea of privatisation is not about selling a share — it's about selling confidence. And I think that's what most investors will be looking for.
Eastern Company was the very first name in this program back in 2019. What did that experience teach you about what international investors actually look for in an Egyptian state asset?
I think Eastern Company was one of the biggest success stories for such programs. The model Eastern Company chose was to bring in a strategic partner — one with the industry know-how and the capability to create value in the business operation. And what Eastern showed is that international investors look for three things: market leadership, cash generation, and governance visibility. When all three pillars were present, Eastern achieved a very strong outcome. Investors don't buy state-owned — they buy brand strength, cash flow, governance, and a believable growth story. The future is what investors look for, not the past or the current status quo.
Let's talk about something that usually happens with state companies — they often carry habits built over decades. Slower decisions, government oversight, legacy costs. What has to change inside a company to make it perform like a listed business?
Your question touches on the most important thing first: the speed of decision-making. That is very different in a listed environment. Using Eastern Company as a case study, the speed of decision-making improved quite significantly after the acquisition. The second thing is accountability — management has to be measured by very specific criteria: return on invested capital, margins, working capital, cash conversion, and shareholder return. And the third, which I also think is critical, is culture. The old culture of protecting assets has to shift to competing with assets — using them as a competitive edge to grow and build value for shareholders, both new and existing.
The government just outlined a new approach to choosing boards of public companies — by professional criteria rather than appointment. Does that change how investors should read an Egyptian state firm right now?
Absolutely. The board's mission is, at the end of the day, to act as a bridge — not a decoration or a nice-to-have. It works like a conveyor belt between state ownership and market discipline. Choosing the right board, because one of its core missions is to provide strategic direction, has to be built on capability — not on appointment for reasons other than capability and the capacity to steer the company in the right strategic direction to build value for shareholders and stakeholders alike.
This also raises a real strategic choice: sell a large stake to one investor, or float smaller slices on the EGX. As a director, which builds more lasting value and why?
That's a very good question, and each option has its own merits. A strategic stake sale brings capital, know-how — as in the case of Eastern — and operational discipline, and sometimes foreign currency, which can be scarce. On the other side, a public float brings market depth, expands local ownership, and strengthens the Egyptian capital market. But it only works if the float is meaningful and liquid. The real answer is actually a hybrid model — the best of both worlds. Anchored strategic investors plus a meaningful public float gives you both transformation and liquidity.
Right now, FTSE Russell is reviewing Egypt's market classification — that's happening this month. How much does that — the liquidity, free float, and index status — actually affect whether these sales succeed?
It's very important. Investors don't only ask whether the company is good — they ask: can I enter, can I exit, can I repatriate my profit, can I benchmark against other markets, and what is the size of the proposition? I understand Egypt was previously targeted for a downgrade in 2025, but is now being considered for frontier market status going forward. At the end of the day, a great asset in an illiquid market gets a liquidity discount. Things have to be done the right way — because index status affects passive flows, fund mandates, liquidity, and valuation multiples.
Historically, Egypt has missed privatisation targets before — partly on timing and market conditions. What's genuinely different this time, and where would you still urge caution?
You're absolutely right. I think the Egyptian economy is now under much stronger reform pressure, and at the same time the government has a much more explicit state ownership policy. The need for private capital is much clearer today, and there is a more serious link between privatisation, foreign currency confidence, and market development. Where I would urge caution is on timing — when to do it and how long it takes — as well as valuation, foreign exchange liquidity stability, and the execution of the deal itself. Egypt has very good assets, but investors always need consistency and clarity. If offerings are delayed, too small, overvalued, or unclear on governance, the market will discount them — and it will not be a good outcome.
And finally, for the international viewer weighing Egypt right now — what's the single most underrated reason to look at a listed state company here, and what risk should they watch out for?
Egypt does not lack assets. The opportunity is to turn state assets into investable companies — and that requires governance, liquidity, and consistency. The underrated reason is that some Egyptian state companies sit in sectors with structural demand: a large population, significant infrastructure needs, large consumer scale, and hard assets that would be difficult to replicate. The risk is not in asset quality itself — it is in the governance and policy discount. Investors will always ask: can management act commercially? Can minority shareholders be protected? Can capital move freely? Once those questions are answered positively, the risk reduces quite significantly.
That's very valuable advice. Ahmed Elleissy Nassef, it's been great having you with us today. Thank you very much.
Pleasure.
