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Tuesday, 19 January 2021

Giza Spinning postpones IPO + shut up about Egyptian Iron and Steel, already

Giza Spinning is shelving its planned IPO until at least 1Q2022 due to covid-19, but will reassess the timeline again based on market conditions, Managing Director Fadel Marzouk told Al Mal. Even if vaccine rollouts begin soon, the company has opted out of listing during the summer of 2021 as the season is “not a good time for an IPO,” he said. Marzouk did not confirm the anticipated size or value of the stake sale, but the company had previously said it is looking to put up to 40% of its shares on the EGX. The proceeds from the IPO will be used to finance an EGP 250 mn project to expand its yarn and garment production capacities.

Fifth time’s the charm? Giza Spinning has repeatedly delayed the IPO, with the recent announcement marking the third time the privately-owned company has postponed. The listing was first meant to take place in December 2018 but pushed the transaction to 3Q2019 to wait for better market conditions. The garment exporter delayed the IPO for a second time to Feb 2020, still citing poor market conditions. When that never happened, the company announced in August 2020 that it was looking to IPO before the year’s end.

Advisors: Beltone Financial is serving as global coordinator and bookrunner and Matouk Bassiouny is legal counsel to the issuer.

Egyptian Iron pushes ahead with liquidation + demerger

The liquidation of Egyptian Iron & Steel is final: That was the message given by Public Enterprises Minister Hisham Tawfik yesterday as the House Manpower Committee began scrutinizing the ministry’s plans to shutter the loss-making company and spin off its mining operations. In an interview with Masrawy, the minister said that the company general assembly’s decision last week was final and can only be overturned by the State Council.

The minister is taking heat for the decision: MP Mostafa Bakry has come out forcefully against the liquidation, calling it reckless and dangerous to the Egyptian economy. Tawfik has defended the decision, saying that it was taken after the ministry attempted to save the company and promising that workers will be compensated in the next three months.

As for its mining spin-off, the ministry is working on building a scaled down mining unit in the Bahariya Oasis as a trial run and will wait to see the concentrations of the raw materials extracted before committing to building the full mine, the minister said.

Background: The company had said last week that its operations would be liquidated in a process that would take up to two years as part of a government strategy to streamline the public sector. It plans to spin off its mining operations to create a new company, Iron and Steel for Mines and Quarries, that will be listed on the EGX in the coming weeks.

** WITH THAT, CAN WE PLEASE SHUT UP about Egyptian Iron and Steel? We’re with Naguib Sawiris on this one: What the government is liquidating is a welfare program for a few thousand workers that costs taxpayers bns of EGP every year.

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