The United tobacco company, a subsidiary of Philip Morris, the world's largest tobacco company, is negotiating with the Egyptian government to purchase a minority stake in the eastern smoke company “Eastern company"Which has an estimated market share of 75% of the cigarette market in Egypt Its market value is about 39 billion pounds (1.3 billion dollars), according to two government sources who spoke to “economy of the East”.
To provide dollar liquidity, Egypt recently worked on selling some of its assets to investors, and succeeded in raising up to 1.9 billion dollars, and hopes to raise another billion dollars from the sale of additional assets over the next few period.
“United tobacco” did not respond to requests from “eastern economy” for comment.
One of the two people familiar with the file told Al-eqtisad Al-Sharq that the negotiations”between (United tobacco) and the government are represented by the holding company and the Ministry of Finance and not with the sovereign fund of Egypt.. The size of the stake is the government's biggest concern at the moment, which there is hesitation about so as not to lose the majority stake in the company,”he said.
"Philip Morris" pays 450 million dollars for the new cigarette license in Egypt
The ownership of “eastern smoke” is distributed between the holding company for chemical industries affiliated to the government and owns about 51%, The ألان investment fund “Alan Gray” owner of about 7.2% of the shares, and the”Union of employees shareholders” 5.2%, while the remaining shares are free to trade on the Egyptian Stock Exchange.
The government in 2019 sold up to 4.5% of its shares in “eastern smoke” worth 180 million dollars at that time.
The company "Philip Morris" paid about 450 million dollars to obtain the new license for the production of traditional and electronic cigarettes in Egypt during June 2022, in a bid from which all foreign companies operating in the country withdrew to object to the terms of the license.
"Alsharqiya Al Dukhan" owns a 24% stake in United tobacco, according to the license obtained by the latter company, which agreement with “alsharqiya Al Dukhan " stipulates that if any of the tobacco companies operating in Egypt or abroad owns 10% of the shares of “alsharqiya Al Dukhan” otherwise, Philip Morris has the right Purchase of the share of "eastern smoke" in "United tobacco" at face value, in addition to 108 million dollars, which is equal to 24% of the value of the license paid.
Source : East
