
20 to 25 percent stake in Misr Aluminium will be sold to a strategic investor
Misr Aluminium: The company made headlines this week when Public Enterprise Minister Hisham Tawfik revealed the interest of a strategic Arab investor in buying a 20 to 25 per cent stake. The deal is expected to be executed through a capital increase with no time frame given.
The capital increase, together with a planned debt issue, are to be used in financing the company’s upgrade plans, the total cost of which was put at $300 million by Tawfik. The company issued a note to the Egyptian Stock Exchange after Tawfik’s statements, explaining that it had hired the US-based Bechtel to conduct a study to revamp and upgrade its current facilities while keeping its capacity at 320 kilotons of aluminium per annum (ktpa).
Another positive development is the company’s announcement that it is mulling over building a solar power station with a capacity of 600-1200 MW. Pharos Holding, an investment bank, commented that the massive rally in aluminum prices had raised the value of the company’s stocks, and expectations that electricity prices will go higher over the longer term will also substantially influence its outlook positively.
Misr Aluminum made profits of LE1.68 billion in the first nine months of the 2021-2022 fiscal year, versus net losses of LE347.72 million a year before. The hike in profits came on the back of a record increase in global aluminum prices in February and March. The company started production in 1975 at its Nag Hammadi plant 100 km north of Luxor making use of its proximity to the Aswan High Dam as a main source of electricity.
Juhayna for Food Industries: Egypt’s leading dairy and juice producer is witnessing a change in its ownership structure, with the Qatari dairy producer Baladna increasing its holdings in the company to 10 per cent.
Baladna first showed interest in Juhayna in July, when it bought a five per cent stake, and this has been increasing until last week when it bought 1,400,000 shares at LE8 per share. This compares to the LE6 it paid for the shares it bought in July.
Baladna was established in 2014 and is Qatar’s largest dairy and beverage producer, supplying over 85 per cent of the country’s fresh milk. According to a statement, the company wants to continue its growth path within Qatar and to expand to other countries. Egypt, with a population of more than 100 million, is a large and promising market, the company said. “Being the market leader, Juhayna is expected to be beneficial for market growth with a strong distribution network,” the statement said.
Juhayna is 50 per cent owned by Pharon, controlled by the Thabet family, Juhayna’s founder. The UAE-based Rimco owns 10 per cent, and now Baladna has another 10 per cent, with the balance freely floated. Juhayna recorded a 23 per cent year-on-year increase in net profits to LE526 million and a 17 per cent increase in sales to LE8.8 billion in the 2021-2022 fiscal year.
Al-Seweedy Electric: Al-Seweedy had a solid first quarter in 2022, with earnings at 8.7 per cent higher than a year earlier at LE761 million. There was a 51 per cent surge in its revenues through the same period to reach LE18.6 billion, driven by growth in its wires and cables business as well as a hike in the prices of its products.
In a conference call to discuss its results, Al-Seweedy noted that it has a backlog of an all-time high of LE73 billion due to foreign-exchange fluctuations. The backlog is composed of 51 per cent civil and networks projects, 27 per cent transmission and distribution projects, and 22 per cent power-generation projects.
The company also shed light on its new Busway factory at a cost of $10 million. The factory produces efficient electricity distribution systems, and the company expects it to contribute to less than one per cent of total revenues. Another important takeaway from the conference call was that the company has made acquisitions in Pakistan and Indonesia that add up to $60 million, with it targeting these markets due to their high population.
*A version of this article appears in print in the 2 June, 2022 edition of Al-Ahram Weekly.
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