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Wednesday, 26 May 2021

Iron and Steel for Mines and Quarries to list tomorrow

Shares of state-owned Egyptian Iron and Steel’s mining spinoff — Iron and Steel for Mines and Quarries — will be listed on EGX at the end of tomorrow’s session after the EGX’s securities registration committee this morning greenlit the move, according to a bourse disclosure (pdf). Egyptian Iron and Steel’s five-working-day period to make a public disclosure to list ended today, after which the EGX will decide on a date to when trading on the new company’s shares will be beginning. The Financial Regulatory Authority (FRA) on Thursday gave the all-clear for the new company’s registration and trading on the EGX.

The new mining company is listing around 978 mn shares at EGP 0.2 a piece, giving it a market cap of EGP 195.4 mn. This will happen through a 1:1 stock split and a capital decrease, which should see Egyptian Iron and Steel’s share price reduced to EGP 1.8, reducing its market cap to EGP 1.76 bn from EGP 1.95 bn, according to a separate filing (pdf).

Background: Egyptian Iron and Steel announced earlier this year that it will spin off its mining operations under a two-year liquidation process that would see it sell its steel plant in Helwan as part of a government strategy to streamline the public sector. Public Enterprises Minister Hisham Tawfik previously said that the perennial lossmaker will have to sell off 6 mn sqm of its land assets to be able to pay off its EGP 9 bn in outstanding debts before liquidating.

The listing comes as Egyptian Iron and Steel reported EGP 724.1 mn in consolidated net losses in 9M2020-2021, compared to EGP 783.8 mn a year before, the company said in a statement (pdf). Revenues also fell almost 10% to end the July-to-March period at EGP 776.2 mn, down from EGP 859.4 mn in the same time last year.

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