Talaat Mostafa's ICON seeks ‘significant’ stakes in 7 Egyptian state-owned hotels

Egypt's leading real estate developer Talaat Mostafa Group (TMG) has submitted an offer to the Egyptian government to acquire a "significant stake with management rights in a sizable portfolio of seven state-owned hotels,” according to a bourse statement on Wednesday.

The offer has been made through TMG's subsidiary Arab Company for Tourism and Hotels Investments (ICON). TMG owns 83.3 percent of ICON's shares.

ICON's proposal includes the acquisition of majority stakes in the 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.

The seven hotels are owned by the Egyptian General Company For Tourism and Hotels (EGOTH).

"The purpose of this acquisition is to undertake development and upgrading of these hotels in order to bring their operational efficiency to higher levels, enabling them to attract a higher quality of tourism to Egypt, leveraging on their unique and historical significance," read TMG's statement.

ICON's hotel portfolio, including projects under development, is estimated to grow to a total of 15 hotels with 5,000 rooms, after the finalization of the deal.

TMG has neither mentioned the value of the deal nor the percentage of the stake its subsidiary is seeking. The developer revealed that EFG Hermes is appointed as financial advisor for the deal.

On Tuesday, the Egyptian government announced that TMG's ICON partnered with a foreign partner to increase the capital of the EGOTH by around 37 percent, or $700 million.

Prime Minister Mostafa Madbouly announced that Egypt signed contracts with the private sector to sell state-owned entities worth $1.9 billion under the Initial Public Offering (IPO) programme which the country adopted earlier this year.