SUMMARY – EGYPT’S TALAAT MOSTAFA GROUP BIDS FOR STAKE IN STATE-OWNED HOTELS, AIMING TO ENHANCE EFFICIENCY AND ATTRACT HIGH-QUALITY TOURISM. THE PROPOSAL IS PART OF EGYPT’S PRIVATIZATION PROGRAM AND IMF-SUPPORTED ECONOMIC REFORMS.
Egypt’s leading real estate developer, Talaat Mostafa Group (TMG), has made an offer to the Egyptian government to acquire a significant stake in a portfolio of seven state-owned hotels. The proposal aims to enhance the hotels’ operational efficiency and attract a higher quality of tourism to Egypt.
TMG’s Offer for State-Owned Hotels
TMG, by means of its subsidiary Arab Company for Tourism and Hotels Investments (ICON), has presented a proposal to the Egyptian government. The offer entails obtaining controlling interests in seven distinguished hotels. These Hotels are Sofitel Legend Old Cataract Aswan, Mövenpick Resort Aswan, Sofitel Winter Palace Luxor, Steigenberger Hotel Tahrir, Steigenberger Cecil Hotel Alexandria, Marriott Mena House Cairo, and Marriott Omar Khayyam Zamalek.
Upgrading Egypt’s Iconic Hotels
TMG’s purpose behind the acquisition is to undertake the development and upgrading of these hotels. The goal is to enhance their operational efficiency and leverage their unique and historical significance. By elevating their quality, the hotels can attract tourists of a higher caliber to Egypt.
ICON’s Hotels portfolio will expand to a total of 15 hotels with 5,000 rooms once the deal will finaliz. This growth includes ongoing development projects.
Talaat Mostafa Group has not disclosed the percentage of the stake its subsidiary seeks. EFG Hermes has been appointed as the financial advisor for the acquisition.
Egypt’s Privatization Program
As part of its economic reform program with the IMF, Egypt is actively implementing a broad privatization program. The government aims to sell 32 state-owned companies in 18 sectors to strategic investors within a year. The recent partnership between TMG’s ICON and a foreign investor will increase the capital of the Egyptian General Company For Tourism and Hotels (EGOTH) by approximately 37 percent or $700 million.
Economic Reforms and IMF Support
Egypt’s Prime Minister, Mostafa Madbouly, announced that contracts had signed with the private sector to sell state-owned entities worth $1.9 billion under the Initial Public Offering (IPO) program. These efforts are part of the broader economic reform program, which includes an Extended Fund Facility (EFF) program with the IMF. This program enables Egypt to receive $3 billion over four years, supporting country to come out of economic crises.