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Monday, 21 October 2019

Qalaa Holdings to IPO TAQA Arabia, Arab Refining Company next year

IPO WATCH- Qalaa Holdings to kick off four-year IPO program next year by listing shares of TAQA Arabia, ARC: Qalaa Holdings is planning to move ahead with the IPO of several of its subsidiaries next year, with IPO of TAQA Arabia scheduled to take place in 2Q 2020 and the Arab Refining Company (ARC) in 4Q 2020, Qalaa Chairman Ahmed Heikal tells Reuters in an interview. Heikal did not provide details on the size of either offering, but had said last year that ARC would list around 30% of its shares. ARC is the largest shareholder in Qalaa’s more than USD 4 bn Egyptian Refining Company (ERC) in Mostorod. The company plans to move ahead with IPOs of its other subsidiaries over the course of four years, until 2023.

Advisors: Qalaa has tapped EFG Hermes and HSBC to manage the TAQA Arabia IPO.

What we already know about the IPO plans: Heikal previously said that Qalaa plans to take all eight of its existing subsidiaries to market. The initial schedule would have seen Dina Farms and ASCOM listing in 2020, while Tawazon, the National Development and Trading Company, the National Printing Company, the United Foundries Company, and Nile Logistics debuting on the bourse between 2021 and 2023. It remains unclear how much this timeline has shifted. Qalaa is planning to retain controlling stakes in all eight companies, and will not sell down its stakes in either ARC or TAQA when they IPO, a company official told Enterprise earlier this year.

Qalaa’s ERC is also set to ramp up its production capacity next year to 5.5 mn tonnes per year, up from a current 4.2 mn, Heikal tells Reuters. ERC successfully began hydrocracker operations last month, making all the plant’s units operational. Heikal said in May he expects the refinery to generate EGP 50-55 bn in revenues next year.

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