SODIC raises $139m for new projects
CAIRO: SODIC, Egypt’s third-largest listed property developer, has completed a 1 billion pound ($139 million) capital increase to help finance new projects as the country’s real estate market begins to recover.
SODIC, also known as Sixth of October Development and Investment Co, said in a statement it had managed to cover 99.2 percent of its deeply discounted rights issue and had no plans to raise further funds. When SODIC announced its capital raising plans in June, it said it would raise about 1 billion pounds over 250 million shares, suggesting a discount of almost 90 percent on its share price of around 34 pounds at the time. Shares are currently trading at 16.33 pounds.
Egypt’s once-booming construction sector was hit hard by the 2011 revolt that ended Hosni Mubarak’s 30-year rule but ushered in a period of economic and political volatility.
Many large real estate contracts were canceled in the wake of the revolt and investment dried up. Three years on, the economy is showing the first signs of recovery, bringing an uptick in demand for property in the country.
SODIC managing director Ahmed Badrawi said last month that two-thirds of the money raised would be invested in a new project in the upscale Cairo area of Heliopolis. The rest would go toward new land the developer is seeking to buy, either on the northern coast or outside the sprawling capital, he said.
SODIC plans to begin construction and offer the first phase of units in the mixeduse development on its 1.3 million-square meter site in Heliopolis before the end of the year. It is targeting sales of 300-600 million pounds in the first phase and 9 billion pounds from the whole project, which it has yet to name.
In May, US private equity firm Ripplewood acquired a near 10 percent stake in SODIC, in anticipation of an economic recovery following three years of upheaval.
In the first half of 2014, SODIC made a profit of 90.53 million pounds on revenues of 635 million pounds, rebounding from losses of 447.13 million pounds in 2013.