OIH bids to ac­quire 216m shares of Sarwa Cap­i­tal at EGP 7.36 per share

Deal to be self-fi­nanced, comes within Oras­com’s strat­egy to ex­pand in non-bank­ing fi­nan­cial sec­tor, says Mahdy

The Daily News Egypt - - Front Page - By Mah­moud Al-Qas­sas

Oras­com In­vest­ment Hold­ing (OIH) re­quested ap­proval on Wed­nes­day from the Fi­nan­cial Reg­u­la­tory Author­ity (FRA),to present a vol­un­tary of­fer to buy a non-con­trol­ling stake of 216.03m or 144.02m shares min­i­mum of Sarwa Cap­i­tal, at EGP 7.36 ($0.4121) each.

The com­pany’s let­ter to the FRA pro­vided two op­tions, the first is that Oras­com will pay EGP 7.36 per share if it only ac­quired 216.03m shares, the other is to pay EGP 6.62 per share if it ac­quired be­tween 144.02m and 216m shares.

The OIH has the right to ac­cept or refuse to buy the of­fered shares in case the num­ber of shares was less than 144.02m shares.

TamerAl-Mahdy,OIH’s manag­ing di­rec­tor, told Daily News Egypt that the ac­qui­si­tion re­quest of non-con­trol­ling Sarwa Cap­i­tal is part of the com­pany’s strat­egy to en­ter new sec­tors, in­clud­ing the non-bank­ing fi­nan­cial sec­tor.

He pointed out that Oras­com has suf­fi­cient liq­uid­ity to im­ple­ment the deal, which will be self-fi­nanced.

Ac­cord­ing to the com­pany’s busi­ness re­sults un­til the end of June, the liq­uid­ity in its fi­nan­cial state­ments reached about EGP 2.6bn, while the cur­rent deal worth about EGP 1.6bn.

The FRA must ap­prove any ac­qui­si­tion deal of more than 10% stake of the cap­i­tal of any se­cu­ri­ties com­pany in ac­cor­dance with the Cap­i­tal Mar­ket Law.

The Egyp­tian Ex­change (EGX) de­cided to set the min­i­mum price of Sarwa Cap­i­tal shares at its pub­lic of­fer­ing price of EGP 7.36 per share, start­ing from Thurs­day’s ses­sion un­til the end of the trad­ing ses­sion where a new clos­ing price is reg­is­tered.

If the trad­ing was not ex­e­cuted within five work­ing days from the date of mov­ing price lim­its, the last clos­ing price be­fore mov­ing the price lim­its will be con­firmed.

“We have been fol­low­ing Sarwa Cap­i­tal for a long time, and we be­lieve it will grow sig­nif­i­cantly in the com­ing pe­riod,” he said.

Mahdi ex­pected that the re­tail sec­tor will be one of the lead­ing sec­tors in the Egyp­tian econ­omy.

He added, “the cur­rent price of Sarwa Cap­i­tal’s shares is very at­trac­tive and we seek to ac­quire more than 25% of the com­pany.”

Re­gard­ing con­cerns about the weak per­for­mance of Sarwa Cap­i­tal shares since its IPO,Al-Mahdy said: “we have no con­cerns about the com­pany’s shares, and the EGX is not the only stock mar­ket that has ex­pe­ri­enced set­backs re­cently.”

In re­sponse to re­ports that the OIH has made that of­fer in an at­tempt to boost Sarwa Cap­i­tal of­fer­ing which is man­aged by OIH-af­fil­i­ated Bel­tone Fi­nan­cial,Al-Mahdy said, “no one will pay EGP 1.5bn to do such a thing, and we work in favour of all share­hold­ers in the OIH.”

More­over, the main share­holder of Sarwa Cap­i­tal, Con­sol­i­dated Fi­nan­cial Hold­ing (CFH), which owns 52.77% of the com­pany have pledged to main­tain 51% stake of the com­pany’s cap­i­tal for two years.

Sarwa Cap­i­tal is set to start rais­ing its is­sued cap­i­tal from EGP 100m to 115m, through new shares to ex­ist­ing share­holder Con­sol­i­dated Fi­nan­cial Hold­ings at the IPO price of EGP 7.36 per share

Naguib Sawiris

Tamer Al-Mahdy

The Egyp­tian Ex­change (EGX) de­cided to set the min­i­mum price of Sarwa Cap­i­tal shares at its pub­lic of­fer­ing price of EGP 7.36 per share

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