Eastern Tobacco Company: Egypt's Economy and Ownership Structure Update

2023-09-04 07:54:00

Eastern Tobacco Company

The share of the Egyptian government decreased to 20.95%.

Cairo – Khaled Hosni

Posted on: September 04, 2023: 11:54 AM GST Last updated: September 04, 2023: 12:39 PM GST

After the Egyptian government announced the completion of the sale of a 30% stake in the Eastern Company, the ownership structure changed so that the Emirati Global Investment Holding Company Limited became the second largest shareholder in the company.

According to the disclosure data submitted to the Egyptian Stock Exchange, the new shareholder structure of the company becomes as follows: the first share of the Emirati Global Investment Holding Company Limited by 30%, then the Holding Company for Chemical Industries (Egyptian government) by 20.95%, and in the third place are the “Alan Jerry” investment funds. , at a rate of 7.21%, then the Federation of Workers Contributors with a share of tobacco at a rate of 5.20%, and finally the Free Shares at a rate of 36.20%.

Yesterday, Sunday, the Prime Minister, Dr. Mostafa Madbouly, witnessed the signing ceremony of an agreement to acquire 30% of the total shares of the Eastern Company, for the benefit of the Emirati “Global Investment Holding Company Limited”.

The Egyptian Minister of Business Sector, Eng. Mahmoud Esmat, said that “according to the agreement signed today, the Global Investment Holding Company Limited will acquire 30% of the total shares of the Eastern Company, at a value of $625 million, equivalent to about EGP 19.336 billion, with the buyer By providing $150 million for the purchase of tobacco materials needed for manufacturing.

This comes at a time when the cigarette market in Egypt is witnessing a suffocating crisis with the expansion of monopoly and the control and storage of large quantities by a number of merchants, which caused prices to flare up at record rates.

With the intervention of the Eastern Tobacco Company, the prices of cigarettes witnessed a relative decrease during the month of August, as the company increased its production to 1560 million cigarettes per day, but the stability did not last long, until prices returned to rise during the last week of the month.

In previous statements, the CEO of the Eastern Tobacco Company, Hani Aman, said that the company has implemented what it promised regarding the crisis of high cigarette prices, and there was a response in the market, explaining that there is strong resistance from the beneficiaries of the crisis.

Aman pledged to take new positions in the coming days, pointing out at the same time that the size of the gains that merchants achieve from selling cigarettes on the black market deserves resistance on their part.

A few days ago, the company announced an increase in its production of cigarettes by 15%, compared to previous months, and the launch of additional quantities of its products, according to a statement by the Egyptian Stock Exchange. This decision came in light of the merchants’ clinging to storing the commodity and selling it on the black market.