Egypt delays decision on EgyptAlum stake sale as expansion plans aim to raise valuation

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The Egyptian government is aiming to increase the valuation of EgyptAlum by three to four times before deciding whether to sell a stake in the state-owned aluminium producer or transfer it to the Sovereign Fund of Egypt (SFE), according to a senior government official.

The official said the decision has been deferred until the company advances a series of expansion projects and secures the necessary approvals, which are expected to enhance its market value. EgyptAlum, listed on the Egyptian Exchange (EGX), currently has a market capitalisation of approximately EGP 118 billion (USD 2.4 billion).

Two options are being considered. The first involves reassessing the company's fair value before increasing its free float through either a strategic investor or a public offering. According to the official, the government has already received acquisition interest, including one proposal from a Gulf-based company and two from European firms. The second option would transfer EgyptAlum to the Sovereign Fund of Egypt, allowing the state to benefit from future value appreciation before making a final decision.

EgyptAlum has previously been identified for a partial privatisation, with international investors expressing interest in acquiring a stake through a capital increase. The company has also been considered for transfer to the SFE as part of Egypt's broader strategy to unlock greater value from state-owned assets.

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The official added that National Bank of Egypt and Emirates NBD have offered financing to support part of the company's future investment programme. EgyptAlum plans to invest EGP 3.5 billion in capital expenditure during the current financial year, with the expansion pipeline expected to support an increase in the company's issued capital.

A major component of the growth strategy is EgyptAlum's agreement with commodity trader Trafigura to develop an integrated industrial complex at its Naga Hammadi site. The company aims to finalise foreign financing agreements before the end of the year. The project is expected to add approximately 300,000 tonnes of annual aluminium production capacity, doubling EgyptAlum's total capacity to around 600,000 tonnes per year. Earlier this year, Trafigura acquired a minority stake in the Naga Hammadi smelter expansion.

The company is also progressing a pharmaceutical aluminium packaging plant at Naga Hammadi, which is scheduled to begin production in September with a capacity of 300 tonnes per month. Half of the production will supply the domestic market, while the remainder will be exported to Saudi Arabia, Italy and other European markets. The facility formed part of EgyptAlum's EGP 6 billion investment programme during the previous financial year.

Separately, EgyptAlum continues discussions with Aluminium Bahrain (Alba) on a proposed USD 3 billion alumina refinery in Safaga, with international lenders competing to finance the project. The company is also negotiating a new 600,000-tonnes-per-year greenfield aluminium project in East Al Tafreeh with Gulf and international investors. According to EgyptAlum Managing Director Mahmoud Agour, these projects, together with the Trafigura expansion and the alumina refinery, could increase Egypt's total aluminium production capacity to around 1.2 million tonnes annually.

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