IMEX Int’l plans to acquire over 50% of Egypt’s Nile Cotton Ginning
M&A WATCH- Energy trading company IMEX International is planning to acquire at least 50% of Nile Cotton Ginning, according to a letter to the Financial Regulatory Authority (FRA). IMEX told the market regulator it will submit a mandatory tender offer for EGP 50 per share. The company has appointed EgyTrend as its financial advisor. A group of unnamed investors with stakes in Nile Cotton are looking to buy a 7% stake held by the company’s workers’ union. The offer has already received a sign off from the FRA earlier this month, we noted recently. The company has been the subject of a drawn out dispute that arose after a court ruling in 2011 to reverse the company’s Mubarak-era sale to private investors.
Could a sale resolve the decade-long dispute? Nile Cotton’s shareholders — which include a large number of private individuals and companies as well as the company’s workers’ union — have been seeking settlement with the government over the ownership dispute. The shareholders also want to use a portion of the company’s land bank to develop residential projects. A sale to IMEX could give the company much-needed liquidity to complete the settlement agreement. The government’s investment dispute resolution committee had reached a settlement agreement with the company that will see Nile Cotton pay EGP 231.1 mn to the Holding Company for Construction and Development. The agreement came as Nile Cotton’s shareholders had been looking to reach a settlement in hopes of resuming trading on the company’s shares on the EGX after an eight-year pause. Public Enterprises Minister Hisham Tawfik had said negotiations on the settlement would resume this week, according to Mubasher.