Back to the complete issue
Thursday, 17 January 2019

Raya redirecting EGP 300 in investments outside Egypt

Raya boss says he’s redirecting EGP 300 mn in investments outside Egypt: Raya Holding for Financial Investments is redirecting elsewhere up to EGP 300 mn of investments that were initially planned for Egypt, Chairman and CEO Medhat Khalil tells Al Mal. Raya is in talks to raise its stake in Poland’s Makarony Polskie to 30%, putting it on equal footing with the Polish pasta-maker’s biggest shareholder. The company is also expanding its electronic devices and home appliances distribution business in Nigeria. In the Gulf, Raya has established a logistics company at Dubai’s Jebel Ali and will import electronics raw materials for resale to entities operating in the area. It has also finished the procedures for establishing a contact center company in Saudi Arabia.

Raya is also holding back on the potential listing or spin-off of a number of its units, he told the newspaper.

So why is Raya changing its mind about Egypt investments? Red tape: Raya subsidiary BariQ’s recycling factory halted production for over a month and a half after running out of raw material after the Environment Ministry revoked its approval of imports. The Administrative Control Authority stepped in to resolve the issue, but the factory, which exports most of its production to the US and Europe, cannot sell its output locally due to the absence of Egyptian standards. Raya has also faced licensing hurdles to sell or export products from several other facilities, including locally-assembled three-wheelers and frozen food products.

All of this comes as Khalil is pushing ahead with a take-private bid for Raya, which has transformed from a distributor and call-center operator into an investment company. That bid was effectively forced on him by the Financial Regulatory Authority (FRA), which found that Khalil and related parties control a combined 42% stake in the company, a percentage that requires an MTO under s securities regulations. Khalil is bidding to take Raya private via a mandatory tender offer for 36.7% of the company’s shares.

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.