Suez Canal Authority to sell 20% of subsidiary in experimental offer

CAIRO (Reuters) – Egypt’s Suez Canal Authority (SCA) is offering a 20% stake in a subsidiary company in line with a government drive to boost the private sector, but selling or leasing the canal is “out of question”, SCA head Osama Rabie said on Wednesday.

Rabie said the sale of the 20% stake in the Canal Company for Mooring and Lights on the Egyptian stock market was an experiment and indicated that there could be more stake sales in the future.

“In principle, we might continue doing this,” he told a press conference.

The Canal Company for Mooring and Lights, which its website says has capital of 250 million Egyptian pounds ($8.10 million), had been placed in a holding company, Rabie said, without giving further details.

He reiterated denials that the canal could be sold or leased.

“It is out of question to privatise (the canal) … or lease it for 69 or 99 years,” he said. “The assets of the authority are owned by the Egyptian people.”

Legal amendments proposed last year for a fund to help the SCA manage its resources triggered speculation that they would open the door to selling stakes in the canal to foreign investors.

The speculation came as Egypt has struggled with sharp financial pressure and an acute shortage of foreign currency.

On Wednesday Rabie said that the proposal for a fund was separate from the issue of selling or leasing any assets.

The canal is a major generator of foreign exchange for Egypt, earning $9.4 billion so far in the current financial year, which ends this month.

Former Egyptian President Gamal Abdel Nasser’s nationalisation of the canal in 1956, which led to a failed British invasion, is seen as one of the modern Egyptian state’s major achievements.

($1 = 30.8500 Egyptian pounds)

(Reporting by Ahmed Elimam and Amal Abbas; Editing by Aidan Lewis and David Goodman)