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Thursday, 10 September 2020

IMEX to submit offer to acquire 100% of Nile Cotton Ginning

M&A WATCH- IMEX to submit offer to acquire 100% of Nile Cotton Ginning: IMEX International has submitted an offer to purchase 100% of Nile Cotton Ginning, the Financial Regulatory Authority (FRA) said in a statement (pdf) on Wednesday. The energy trading company has originally planned to acquire a 50% stake in the Nile Cotton, but after the regulator ordered them to purchase a minimum 51% stake it will now look to buy all 53 mn shares in the firm for EGP 50 apiece. IMEX plans to finance 75% of the purchase through a loan from the National Bank of Egypt, and the remaining 25% from its own capital, the FRA said.

Advisors: The company has appointed EgyTrend as its financial advisor on the transaction.

Background: IMEX’s original offer to acquire 50% of Nile Cotton Ginning was plunged into uncertainty after majority shareholder Samir Afifiy and associates, who collectively own 13% of the company, refused IMEX’s offer price last month, said they would not accept any offer below EGP 70 per share. Nile Cotton Ginning has been mired in a decade-long dispute that arose after a court ruling in 2011 to reverse the company’s Mubarak-era sale to private investors. The ruling nullified the privatization claiming that the company had been undervalued. An appeal was turned down in 2013 by the Administrative Court. The government’s investment dispute resolution committee 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, as it looks to resume trading on the EGX after an eight-year hiatus.

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