Cairo, Egypt (CNN) – CNN sources reported in Arabic that the Saudi Egyptian Investment Company – owned by the Saudi sovereign wealth fund – intends to increase the volume of its investments in Egypt in the coming period, by acquiring a stake in Misr Aluminum Company, and the increase in the stake in the Egyptian company International Industries Pharmaceutical-EPICO.
The Saudi Public Investment Fund launched the Saudi Egyptian Company for Investments, during the month of August, with the aim of investing in the infrastructure, real estate, healthcare, agricultural and pharmaceutical sectors in Egypt, and a few days after its establishment, announced the acquisition of minority stakes in 4 government companies listed on the Egyptian Stock Exchange worth $1.3 billion, according to an official statement.
An official source of the Misr Aluminum Company, who wished to remain anonymous, told CNN in Arabic that a company has been commissioned to prepare a study on the fair value of the stake to start procedures to increase the company’s capital by 300 million dollars to finance the company’s development plan and maintain the company’s production capacity at a rate of 320,000 tons annually, on the condition that the Saudi Sovereign Fund acquires a stake in the company by participating in a capital increase subscription for a value that can reach $200 million, expecting to complete the study and start the capital increase within one to two months.
Misr Aluminum Company has engaged Premier Financial Consulting Company to prepare a study on the fair value of the company’s shares, in order to increase the company’s capital. To support the rehabilitation of the existing factory and maintain the production capacity of 320 thousand tons.
The source explained, in exclusive statements to CNN in Arabic, the importance of subscribing to the company’s capital increase to maintain the company’s production capacity, which achieves a good financial performance, as the company’s profits increased in the first quarter of the current fiscal year by 110.8% to reach 642.6 million pounds ($26.1 million).) and distributed to shareholders a cash coupon of 4.5 Egyptian pounds ($0.18) for action.
Misr Aluminum Company’s capital is £1.65 billion ($67.2 million), spread over 415.5 million shares, and the ownership structure is split between the Holding Company for Metallurgical Industries for 89, 84%, and El-Nasr Mining 2.2%, with the remainder being free floating shares.
An official source at the Egyptian International Company for Pharmaceutical Industries-Eppico confirmed in exclusive statements to CNN in Arabic that the Saudi sovereign wealth fund acquired 4.7% of the company over the past month, and intends to increase its stake. contributing to a capital increase, which is expected to be offered in the coming period after obtaining official approvals.
Money market expert Mohamed Kamal said there is demand from Gulf investment funds to acquire shares of companies listed on the Egyptian Stock Exchange, as part of his plan to help Egypt overcome the exchange rate gap crisis and exploit the opportunity to decline in the market value of publicly traded companies, which earn high returns and pay large cash dividends to shareholders, such as Misr Aluminum Company, which is characterized by a low profitability factor and high cash dividends.
Several Gulf countries have allocated 22 billion dollars to Egypt in investments and loans, divided between 5 billion deposited by Saudi Arabia at the Central Bank of Egypt, another 10 billion pumped by the Saudi sovereign wealth fund, 5 billion that Qatar intends invest in Egypt, and $2 billion from Abu Dhabi’s sovereign wealth fund to buy shares in companies listed on the Egyptian Stock Exchange.
Kamal added, in exclusive statements to CNN in Arabic, that the Gulf funds’ appetite to invest in the Egyptian bourse has prompted them to hit sharp uptrends lately, as the bourse’s main index soared to its highest level in two years, and the average value of trading increased to £1.6 billion (65.1 billion pounds. million dollars) per day, and made the most during Monday’s session number of stock exchange transactions in 12 years.
In case the aluminum deal is implemented, the total number of companies in which Saudi Egyptian Investment Company holds shares will become 6 companies: Abu Qir Fertilizers and Chemical Industries, Misr Fertilizers Production – MOPCO, Alexandria Containers and Commodities Handling, E-Finance for Financial and Digital Investments, and Egyptian International Pharmaceutical Industries – Ippico and BTech, which acquired a 34% stake in early October.
