In 1st military asset sale, Egypt transfers Wataniya shares to new entity managed by Khaled Abu Bakr

Marking Egypt’s first sale of its military-owned assets, the government announced on Thursday the transfer of shares in military fuel retailer Wataniya to a new company. The new player, Quick Fuel, is to be managed in turn by TAQA Arabia — a private sector firm which is owned by natural gas businessman Khaled Abu Bakr and which plays a large role in Egypt’s energy distribution sector. The military has also held a significant share in TAQA since 2023. The deal with TAQA Arabia represents Egypt’s first concrete move toward one of the central components of its reform commitments under loan programs with the International Monetary Fund. Dating back to 2021, abortive steps toward selling shares in military companies to Gulf investors have repeatedly come to nothing, with sources citing concerns over company valuation  and the management of strategic assets. Under the new arrangement, announced by Prime Minister Mostafa Madbuly on Thursday following a signing ceremony at the New Capital, ownership of 172 fuel stations will be transferred to a newly established company, Quick Fuel for Trading and Distribution of Petroleum Products, according to the premiership statement. Nearly 300 fuel stations nationwide are operated by Wataniya, a company under the umbrella of the National Service Projects Organization (NSPO), one of the military’s economic arms. TAQA Arabia is to acquire a 10 percent stake in Quick Fuel and take full responsibility for managing and operating the network, according to the prime minister’s statement. Abu Bakr and the head of the NSPO attended the signing, along with the investment minister and a handful of other senior figures in the military’s financial affairs authority. The winding road to Wataniya’s share sale Wataniya has been chalked for privatization since 2021, with initial interest from state investors in the Gulf. But the process has run into hurdles with concerns from both the foreign investors and the state itself. Military-owned companies have always operated with little to no public disclosure, making it difficult for buyers to obtain information needed to conduct due diligence. On signing a loan agreement at the end of 2022, the IMF called for greater transparency around state-owned companies, including those owned by the military, as part of its recommendation that the state scale back its role in the economy and expand private-sector participation. State energy firms from both the United Arab Emirates and Saudi Arabia were reportedly competing for shares in Wataniya at first. But a parliamentary source with close ties to the government told Mada Masr earlier this year that the sale of Wataniya shares to Abu Dhabi’s sovereign wealth fund, which they said was explored years ago, was hindered at the time by the lack of available company data, including data on how the company acquired the land it used for its stations. Any buyer would require title deeds or even lease agreements before attempting a purchase, the source said at the time. The government, on the other hand, imposed strict confidentiality requirements, including around potential sales for Wataniya, requiring investors to sign a non-disclosure agreement in order to review data, according to a 2023 Cabinet report that touched on the delays in selling state-owned assets. Egyptian authorities also expressed concern regarding the implications of inviting foreign investors into the management of key strategic assets or the land where assets are located. Disputes over the assets’ value derailed discussions, while some agencies raised the issue that the sales could grant foreign investors exaggerated access to key areas of land across the country, according to sources who previously spoke to Mada Masr. A workaround in recent years sought to separate Wataniya stations located on highways and near border areas from those that could be offered to investors, a government source familiar with the IMF’s work in Egypt told Mada Masr in 2024. Years in the making June’s sale concludes talks between TAQA Arabia and the NSPO that first began in November 2023 when TAQA Arabia submitted a non-binding offer to acquire a stake in Wataniya and advanced to preparations for due diligence. A subsidiary of Qalaa Holdings chaired by businessman Ahmed Heikal, TAQA Arabia is Egypt’s largest private energy distributor, operating across natural gas, electricity, petroleum products distribution, solar energy and water services. Its owner, Khaled Abu Bakr, worked in a personal capacity with the General Intelligence Services companies that played a key role in the 2018 deal for Egypt to buy Israeli natural gas. The NSPO itself also became a shareholder in TAQA Arabia in 2023, acquiring a 20 percent stake, while Emirati company Rimco EGT Investment LLC also increased its share up to a 14 percent stake in the company. TAQA Arabia CEO Pakinam Kafafy described the new agreement as “an important milestone in the company’s strategy to expand the petroleum product distribution and marketing sector in Egypt,” according to the premiership’s statement. The step concluded Thursday comes after the government yet again identified Wataniya as one of the four military-affiliated companies on its privatization agenda earlier this year, as a delegation from the IMF arrived in Cairo to begin the latest review of its ongoing IMF program. The NSPO’s Silo Foods, Chill Out gas stations and the National Company for Road Construction, Development and Management were also named as on the table for stock market listing or sale to strategic investors. According to the prime minister’s Thursday statement, Quick Fuel, the new entity taking over some of Wataniya’s shares, is set to be listed on the Egyptian Exchange in the future, at which point TAQA Arabia will have the option to raise its stake in Quick Fuel by an additional 15 percent. A government source directly involved in the asset sale program who spoke to Mada Masr in May ruled out that listing dates for any of the four military companies would be set before the end of the fiscal year in June. The official said initial estimates indicated that only one company may be ready for listing within the coming first months of the new fiscal year starting July, while two are still far from meeting Egyptian Exchange listing criteria and the last remains stuck in land ownership procedures. The four companies had signed agreements in 2025 with The Sovereign Fund of Egypt and a number of consulting firms to restructure their operations in preparation for public offerings, originally planned for last year. But with the early arrival of one of the IMF’s review delegations to Cairo in mid-May, the parliamentary source said that the privatization flurry and the steps to publicly list various companies are part of the government’s public-facing performance and the message it wishes to broadcast to the lender. The IMF has repeatedly criticized Egypt over the slow pace of state divestment and efforts to reduce the military’s footprint in the economy. While Egypt has completed a handful of sales involving state-owned civilian assets, the NSPO deal with TAQA breaks a deadlock on the sensitive military economic sector. The post In 1st military asset sale, Egypt transfers Wataniya shares to new entity managed by Khaled Abu Bakr first appeared on Mada Masr .