Egypt's Citadel Capital delays share offering of energy distributor

Reuters, Monday 11 Apr 2011

Private equity firm pushes listing to late 2011 to give investors 'full value'

Egypt's Citadel Capital has postponed plans for the initial public offering (IPO) of its electricity and natural gas distributor Taqa Arabia because of lower valuation prospects, a senior executive said on Monday.

The private equity firm, which originally planned to list shares of Taqa Arabia in June, now sees an IPO by late 2011, said Stephen Murphy, managing director for institutional fundraising at Citadel.

"If public markets were closed in Egypt for a while, it's only natural that you are not going to get full value for your investments," he said.

Murphy added that the company is evaluating all options for Taqa Arabia, including a global depositary receipt offering.

Citadel's chairman said last year that new funds would help Taqa, which also generates electricity, to expand its business in Egypt and elsewhere in the region. The IPO could raise around US$175 million, depending on the percentage stake sold and the price.

Citadel has been looking to expand its east African portfolio with investments in the agriculture and food processing, microfinance and transport sectors.

The company expects to seal a debt package by June for its east African railway venture, its managing director for the region said earlier in the month.

Murphy said the private equity firm remains on track to complete the deal on schedule.

Citadel, which has a 51 per cent stake in Rift Valley Railways (RVR), plans to inject $287 million in the railway, which serves Kenya and Uganda through a $164 million long term loan, $80 million from shareholders and the rest from internally generated funds.

The Cairo-based firm, which controls investments worth $8.3 billion, mainly in the Middle East and East Africa, controls 19 platform companies that in turn own stakes in other companies.

Last year, Citadel said it will focus on improving the management of the companies it controls after it narrowed its losses in the third quarter.

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