CAIRO, Feb 22 (Reuters) - Egypt's sovereign wealth fund is widening its net as it looks for potential buyers of the military's fuelling station chain Wataniya Petroleum Co by adding franchisers to the list of candidates, its chief executive said.

The Ministry of Defence has chosen the Sovereign Fund of Egypt to sell part of a portfolio of companies in what would be the country's first spin-off of companies owned by the military.

Wataniya, which controls about 200 fuelling stations, and mineral water bottler Safi will be the first companies owned by the military's National Service Projects Organisation (NSPO) off the auction block.

The sovereign fund is helping sell 80%-90% of NSPO's Wataniya while retaining a 10%-20% stake for itself, its chief executive Ayman Soliman said. The buyer will probably hold the fuelling stations on a long-term leasehold basis.

"As we went through the process, we discovered that there are other different models, such as in Europe, from what we understand, petrol stations are no longer owned by the companies themselves or the distribution companies themselves," Soliman said.

"They just franchise out the brand. There are now specialised operators that deploy their own balance sheet towards acquiring the station, which widen the scope of potential investors," Soliman said, adding that whatever brand comes in could franchise it under a contractual agreement.

He hopes to complete the sale by the end of June.

"We've done the initial work on the asset. We produced our teaser on the asset and the process letter which they are using to engage potential partners," Soliman said.

Abu Dhabi National Oil Company (ADNOC), which has been expanding in the region, has been named as one of several contenders, he added. He declined to name the other possible contenders, but local media have mentioned local energy firm Taqa Arabia as a possible candidate.

The NSPO delegated the sovereign fund to invest in a number of companies and assets and to bring in other partners.

"They showcased a number of assets," Soliman said. "So we picked the ones that we see that are marketable and ones that are in sectors that are attractive."

"Our mandate is to act as a catalyst for FDI for private sector participation," he told Reuters.

The fund has earmarked three other NSPO candidates for sale but has yet to disclose their names. The three are in food and non-food consumer goods and in petrochemicals.

Wataniya is one of two chains of fuelling stations owned by the NSPO, Soliman said. The other is Chillout, which the NSPO owns separately through its subsidiary National Company for Roads. (Reporting by Patrick Werr; Editing by Hugh Lawson)