Back to the complete issue
Tuesday, 9 October 2018

Hassan Allam announces IPO with listing on EGX + GDR program, will use proceeds to grow solar portfolio and acquire specialty engineering outfit

** #4 IPO WATCH- Hassan Allam announces plans to sell 44.3% stake on the EGX, offering to include GDR program: Leading construction and engineering group Hassan Allam announced yesterday its plans to sell 44.3% of the company in an initial public offering that will include both ordinary shares on the EGX and global depository receipts (GDRs) on the London Stock Exchange. The company expects to price the offering in early November, the company said in its intention to float (pdf).

Who’s selling? Per the ITF, the selling shareholders are “the Hassan Allam family which collectively owns an 86.2% stake in the Company, as well as the International Finance Corporation which owns a 13.8% stake.” The selling shareholders will re-inject USD 70 mn in proceeds from the transaction through subscription to a capital increase.

Use of proceeds: The company will use proceeds from the capital increase to “(a) develop a portfolio of solar assets under Lightsource BP powered by Hassan Allam Utilities, (b) fund its water platform by developing new assets and acquisitions, and (c) acquire a specialty engineering company and support continuing growth under the construction and building materials businesses.”

The equity story in a nutshell: If you’re long-Egypt, you want to be long-Hassan Allam. Alongside Orascom Construction, it’s the one outfit in Egypt that can (and is) building everything we need to build, from critical infrastructure including roads, bridges and tunnels to office parks and beyond. Renewable energy is a big sweetener. Says Co-CEO Amr Allam: “Our ultimate goal is to continue delivering steady growth and consistent returns to our shareholders generated by our legacy construction and building materials businesses, while simultaneously driving accelerated recurring revenue growth from utility plays in a nascent and fast-growing market.”

The financials: Hassan Allam reported revenues of EGP 11.5 bn last year, up 81.4% from 2016. Net profit in 2017 was EGP 339.7 mn, up 3% y-o-y. The group had a backlog worth EGP 55.8 bn as of 30 June.

Advisers: The company has tapped EFG Hermes and Renaissance Capital as joint global coordinators and bookrunners, and Arqaam Capital as bookrunner. Shearman & Sterling is acting as international counsel, while White & Case LLP is international counsel to the underwriters. Matouk Bassiouny has been appointed local counsel to the issuer. MHR & Partners, in association with White & Case LLP, is local counsel to the underwriters. Inktank Communications is investor relations advisor.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.