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Thursday, 24 June 2021

From the trading floor

Sherine Abdel-Razek , Wednesday 7 Oct 2020

Orascom Investment Holding (OIH): The company owned by business tycoon Naguib Sawiris might be considering acquiring a majority stake in United Bank, 99 per cent owned by the Central Bank of Egypt.

Sawiris told the financial daily Hapi that the price of United Bank’s shares was in the price range OIH had put for its debut in the banking sector and was more than that of the two Cairo-based Lebanese banks that are also currently on sale, Bank Audi and Blom Bank. The aim of the acquisition is to open the door for OIH to be involved in small and medium-sized enterprise (SME) finance.

Sawiris has been showing interest in the Egyptian banking sector for a while, and he has also expressed his desire to be awarded a license to open a bank, declined by the Central Bank governor. He has also tapped non-banking financial services thanks to controlling stakes in investment bank Beltone and Sarwa Capital.

OIH is one of two entities resulting from the ongoing demerger of OIH activities, the other being Orascom Financial Holding. Following the demerger, only one of the two companies will be listed on the Egyptian Stock Exchange, depending on which is the more attractive to investors, Sawiris said.

The demerger took place to allow each of the two resulting entities to focus on one investment sector, OFH on financial services and OIH on logistics and transportation, agro-industry, or real estate. Should OIH choose to focus on real estate, the company will consider incorporating Ora Developers, also chaired by Sawiris, as a subsidiary. Sawiris has also said that OIH is considering investing in strategic plots offered by Egypt’s Sovereign Wealth Fund (SWF), like the building formerly used as the headquarters of the former ruling National Democratic Party.

Bank of  Alexandria (ALEXBANK): The leading privatised commercial bank is witnessing yet another change in ownership structure. The Italian Intesa Sanpaolo, major shareholder in ALEXBANK, has bought back a 9.75 per cent stake in the Bank from the International Finance Cooperation (IFC).

Through this deal, valued at $162 million, the Italian banking group has increased its stake in ALEXBANK to 80 per cent. In 2006, ALEXBANK was the first state-owned bank to sell a majority stake to a strategic investor, Intesa Sanpaolo, which took over 80 per cent of the bank while the government retained a 20 per cent stake. In 2008, IFC bought the 9.75 per cent stake in ALEXBANK from Intesa Sanpaolo. The bank recorded a 10.3 per cent increase in its net profits in 2019 to reach LE3.39 billion.

Nile Cotton Ginning (NCGC): All deals related to the acquisition by IMEX International of NCGC will be suspended until a settlement on NCGC’s debts owed to the Holding Company for Construction and Development (HCCD) is paid.

HCCD chair Hisham Abul-Ata told the local press that IMEX plans to increase the capital of NCGC to pay the settlement amount after purchase would not preserve the holding company’s rights. Holders of 94 per cent of NCGC shares had earlier been told they could sell their shares to IMEX in response to the latter’s buyout proposal at LE50 per share.

Sixth of October Development and Investment Company (SODIC): The real-estate developer is on track with its schedule to deliver units in its Eastown district in New Cairo (EDNC) in 2021, according to a recent company statement. SODIC has signed LE1.7 billion in contracts with construction firms to build the district, and over 50 per cent of the construction work has now been completed.

EDNC is the commercial component of Eastown, SODIC’s mixed-use development strategically located directly on Road 90, the main street and central axis of New Cairo and immediately adjacent to the American University in Cairo (AUC) campus. “This project is in line with the company’s strategy to largely retain prime non-residential assets to contribute to recurring income in the future. With its prime location and offerings, EDNC will serve as the cornerstone of SODIC’s recurring income portfolio,” said Maged Al-Sherif, SODIC’s managing director.

*A version of this article appears in print in the 8 October, 2020 edition of Al-Ahram Weekly

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