The Daily News Egypt

NI Capital to launch tender for HHD’s 15% stake offering bookrunner in September: sources

HHD OPENS DOOR FOR REAL ESTATE DEVELOPERS TO COMPETE FOR MANAGING COMPANY’S PORTFOLIO OF ASSETS

- By Alyaa Stouhy

Heliopolis Company for Housing and Developmen­t (HHD) aims to offer 14-15% of its assets on the Egyptian Exchange through public offering and private placement, Sahar El-Damaty, managing director of financial affairs at HHD, told Daily News Egypt on Saturday.

NI Capital will launch a tender during September for investment banks to choose the offering’s bookrunner, according to sources.

Meanwhile, HHD opens the door for real estate developers to compete over managing the company’s portfolio of assets and land.

Moreover, the Minister of Public Enterprise­s Sector, Hisham Tawfik, told Daily News Egypt that the prospectus to select the managing company will be announced after the company’s general assembly on 26 August. He added that the most important conditions in the prospectus are having good technical expertise in the field of real estate developmen­t and management of developmen­t companies, providing a management plan for the company during the management contract period, and finally the good solvency of the bidder to ensure the purchase of 10% of HHD.

The current market value of HHD is estimated at EGP 11bn, meaning that the strategic investor will have a share worth EGP 1.1bn.

Tawfik said that in the event of contractin­g with an alliance of strategic investor and real estate developer, the tender will include the obligation to submit any decision related to the disposal of the company’s assets to a general assembly as a netting contract.

Tawfik pointed out that the tradeoff in the financial offers will focus on the percentage that the management company will receive annually from HHD capital for management services.

For her part, El-Damaty said that the upcoming general assembly will see the first steps of choosing the new management company by receiving the approval of the shareholde­rs.

She explained that a committee formed by the Holding Company for Constructi­on and Developmen­t (HCCD), the HHD, and real estate experts will begin to develop a prospectus for the management of HHD, noting that the experience will be a major determinan­t for the selection, whether the bidder is a strategic investor or an alliance between a real estate developer and a strategic investor.

She added that the process of offering 25% of the shares of HHD includes the allocation of 10-11% to the management company, as a private equity or an alliance between a strategic investor and a real estate developmen­t company,

The contractua­l terms announced in accordance with the general assembly’s call set the main objectives of the management contract to raise the company’s competitiv­e capabiliti­es, increase profits and sales, as well as qualify the current management structure and appoint cadres capable of leading the company after the expiration of the management contract, as well as the developmen­t of investor relations management.

The contractua­l conditions set the compositio­n of the Board of Directors of seven members, including two members from the company’s management, two representa­tives of the HCCD, and three non-executive members representi­ng the other shareholde­rs.The management company is to commit to supervise the executive management and restructur­ing of the company.

The conditions included three performanc­e indexes, equal in relative weight to reward management, with a minimum of 20% annual growth in sales, and 20% of minimum profit growth, and 20% minimum for the growth of the market price of shares, which will reward the company undetermin­ed percentage UTD of HHD capital shares per index.

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 ??  ?? Sahar El-Damaty
Sahar El-Damaty

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