Egypt's state-owned e-finance to go public on 18 October

Doaa A.Moneim , Thursday 30 Sep 2021

e-finance for Digital and Financial Investments, Egypt’s first fintech platform and one of its leading developers for digital payment infrastructures, announced on Thursday that it will be listed on the Egyptian Exchange (EGX) under Egypt’s initial public offering (IPO) programme on 18 October.

E-Finance office building. Photo courtesy of Shuttering Construction Company website.

The group said that applications for subscription are set to be received from traders between 6 and 13 October, while trading shares is scheduled to commence on 18 October.

It also said that it plans to list 80 million ordinary shares at an initial price ranging between EGP 12.5 and EGP 13.9 per stock, adding that it will announce the final share price on 9 October.

The offering is anticipated to include a primary issue and sale of up to 177,777,778 ordinary shares on the EGX in addition to a secondary sale by existing shareholders of up to 80 million existing ordinary shares on the EGX, which together represent up to 14.5 percent of the group’s share capital, according to the group.

e-finance said the listing will include an institutional offering, which is a placement to certain institutional investors in Egypt and elsewhere along with a retail offering to retail investors in Egypt.

The two offerings will be extended at the same price per share, according to the group.

“e-finance is readier than ever to begin its journey as a publicly listed business, with our potential IPO marking a major milestone after 16 years of hard work and transformation,” e-finance chairman and CEO Ibrahim Sarhan stated.

“Since the company’s establishment to develop and operate digital channels for the government’s financial network through e-finance for digital operations, we have successfully grown our business far beyond the government sphere and our reach now extends to a variety of sectors across the Egyptian economy.”

Looking ahead, e-finance for Digital and Financial Investments is in a very strong financial and operational position to thrive over the coming years and repay the confidence of its stakeholders and valued investors, according to Sarhan.

e-finance Group was founded in 2005 with the purpose of operating the Egyptian government’s financial network.

It has become the sole entity authorised exclusively to process and settle the government’s payments and collection transactions and is the state’s digital partner of choice, with a dynamic business model covering the entire digital payments ecosystem.

The group’s revenues grew by a compound annual growth rate of 30 percent between 2018 and 2020 to record EGP 1.2 million for 2020 and EGP 904 million for the first half of 2021.

Moreover, the group’s earnings before interest, taxes, depreciation, and amortisation grew by 35 percent to post EGP 465 million.

“The group’s performance underscores its centrality to Egypt’s payment ecosystem and its continuous development of innovative products and services that generate value for state-owned and private enterprises across the breadth of Egypt’s growing economy,” e-finance explained.

“Besides processing EGP 2.1 trillion in government transactions, e-finance owns the largest producer of payment cards in Egypt, offering integrated smart solutions tailored to banking, transportation, cultural, educational, and club and smart city services.”

Besides being the operator of the government’s financial network through its primary subsidiary e-finance for Digital Operations, the group is also a leader in digital payments, with the largest ecosystem of bill aggregators in Egypt.

e-finance’s ‘Khales’ platform is a central bill processing hub for 13 partners through a network of more than 326,000 point of sale machines, in addition to its digital channels, including a mobile app and an online bill payments portal.

Furthermore, e-finance is the owner and operator of ‘e-aswaaq’ — the group’s latest venture in the e-commerce space — a digital purchasing platform with over 300,000 merchants specialising in agriculture, commerce, industry, and tourism.

Moreover, e-finance owns a business process outsourcing (BPO) company called ‘e-nable’, which provides solutions from human resources and information technology outsourcing to full contact centre services, fielding more than 1.5 million calls per month.

On 8 September, Minister of Planning and Economic Development Hala El-Said stated that the government is expected to resume the stalled IPO programme before the end of 2021.

In March 2019, Egypt offered the first state-owned company to be listed in the EGX under the IPO programme.

Accordingly, the company offered 4.5 percent of its shares in the EGX, with a total value of EGP 1.7 billion pounds ($99 million).

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