Two state-owned real estate companies seek investments through capital increase

Newsletter

20 Mar 2023

Two state-owned real estate companies seek investments through capital increase. State-owned real estate companies, El Nasr Housing and Development and Maadi for Development and Construction, will drum up investments from strategic investors through capital increase rather than selling a stake belonging to existing shareholders. Making public share offerings in the two companies will come at a later stage. Paint and Chemical Industries (Pachin) will have 10 working days to respond to Dubai-based National Paints Holding’s (NPH) mandatory tender offer (MTO) to fully acquire the company. The countdown to the FRA-enforced deadline begins from the day of publishing the announcement of the acquisition bid. (Hapi Journal)

A new gov’t investment fund wants to attract FDI from expats
The Emigration Ministry will set up a new company aimed at encouraging Egyptians living abroad to invest in the local economy and bring more hard currency into the country. The Egyptians Abroad Investment Company will promote investment to major expat investors as well as regular savers, and has signed up eight Egyptian businessmen living abroad to sit on the board. (Al Mal)
Egyptian Linear Alkyl Benzene (Elab) will be the first company to go to market via the Sovereign Fund of Egypt’s (SFE) pre-IPO fund
It is expected that the transaction will include an initial public offering of shares on the EGX. Eight companies have now been added to the fund. The SFE is adding state ins. company Misr Ins. Holding to its portfolio, while an unconfirmed report in January claimed that Banque du Caire, Misr Life Ins. and Elab. Safi and Wataniya are not included in the fund. CI Capital has reportedly started marketing the two military-owned companies to strategic investors, with the goal of selling c. 10% of each. (Al Borsa)
SFE open to selling 100% of Safi, Wataniya to strategic investors
The Sovereign Fund of Egypt (SFE) could sell up to 100% of military-owned firms Safi and Wataniya to strategic investors depending on market appetite. The government was looking to sell at least 10% in each company as part of its privatization drive and that CI Capital had been tapped to manage the sales. There will be no upper limit to the size of the stake on offer. (Asharq Business)
Concerns over Egypt’s progress in selling state assets are contributing to the shortage of hard currency and pressure on the EGP
Which have intensified in recent days despite three devaluations over the past year. Portfolio investors are continuing to sit on the sidelines until they see signs that the government is delivering on its commitments under the IMF program, which include accelerating privatization and maintaining a fully flexible exchange rate. (Hapi Journal)
Saudi Arabia has invested 1.3 billion USD in listed state-owned companies, a fraction of the 10 billion USD it originally pledged to support the economy through the crisis triggered by the war in Ukraine
Future financial support to countries would no longer be given unconditionally and would come with strings attached. Pressure is continuing to mount on the EGP in the offshore markets, with derivative contracts widening further from the official rate at the end of last week. Twelve-month non-deliverable forwards (NDFs) rose to a record 39.19 on Thursday, while in the parallel market the USD rate rose to between 34.5-35.55. In the credit markets, the spread on the cost of insuring the country’s debt rose to almost 1500 bps — the second-highest level on record. (Al Mal)
Four companies open new logistics zones, factories in SCZone
Mercedes-Benz, local shipping firm Kadmar and two Chinese companies inaugurated new logistics zones and factories in the Suez Canal Economic Zone. New Mercedes hub to handle 12,000 cars annually: Mercedes-Benz opened a new 35 million EGP logistics zone in the SCZone to serve as a warehouse and a distribution platform for cars and spare parts. The facility can handle up to 12,000 cars annually. (Hapi Journal)
Jushi Group inaugurated a new 320 million USD production line at its factory in China’s TEDA trade zone
The line has an expected output of 200k tons annually, and increases total investments in the factory to 920 million USD. Also, Egypt Fanyang Textile Company, also located in the TEDA zone, inaugurated a 60 million USD factory. The facility is specialized in producing fabrics for clothing, blankets and home furniture, and is expected to produce 30k tons of fiberglass annually, generating revenues worth 150 million USD. (Hapi Journal)
Abu Dhabi Ports (ADP) will develop and operate a container terminal at Safaga Port under a 200 million USD, 30-year concession agreement signed with the government
ADP will spend USD 200 mn on “superstructure and equipment, buildings, and other real estate facilities and utilities’ network inside the concession area,” most of which will be spent in 2024 and 2025. The Emirati company inked the agreement with the Red Sea Ports Authority, making the Safaga Port the “first internationally-operated port in the Upper Egypt region,” it said. (Arab Finance)
ADP first expressed its interest in Safaga port in 2021, and signed a term sheet with the government last year
The terminal was one of nine proposed PPP infrastructure projects given preliminary approval by the cabinet last year. ADP also signed two 15-year agreements with the Suez Canal Authority to develop cement terminals in Al Arish Port and West Port Said Port, which will collectively require 33 million USD of investment. The two terminals will feature silos with a combined storage capacity of 90k tons, and are expected to be operational by 4Q 2023. (Arab Finance)