Back to the complete issue
Wednesday, 27 October 2021

Madinet Nasr to acquire real estate firm Minka, gets new CEO as part of the transaction

Madinet Nasr Housing and Development (MNHD) is looking to acquire real estate firm Minka Development for EGP 200-220 mn, the company’s head of investor relations, Salah Katamish, told us yesterday following a regulatory filing (pdf) from the company on Sunday. MNHD has appointed Baker Tilly Wahid Abdel Ghaffar & Co to conduct a fair value study of Minka and expects the results within four weeks, Katamish said, without disclosing when MNHD expects to complete acquisition.

MNHD and Minka know each other well: Minka agreed to purchase two land plots in MNHD’s Taj City development over the past two years for EGP 1.33 bn: The Hoft for EGP 184.8 mn in 2019, and the larger Kinda project for EGP 1.15 bn last year.

So why is the transaction in the EGP 200 mn range? So far, Minka has only paid EGP 200-220 mn for the plots, Katamish tells us. By acquiring the company, MNHD is essentially buying back the two plots it originally sold. The third project owned by Minka — Kensington, outside Taj City — will be separated from Minka ahead of the acquisition.

How is the acquisition being funded? MNHD will go ahead with a EGP 374.4 mn capital increase, part of which will be used to fund the acquisition, it said in a separate disclosure (pdf) yesterday. The remaining EGP 154-174 mn will go towards MNHD’s residential project in West Assiut.

Minka’s owners will then reinvest in MNHD: The Sallam family will use the proceeds from the sale of their company — plus an additional EGP 50 mn — to purchase a minimum 5% stake in MNHD. This will make them the third largest minority shareholder in the company after BPE Partners’ managed fund’s 29% and National Company for Construction and Developments’ 15%.

Minka’s CEO has also become MNHD’s CEO: MNHD’s board also approved the appointment of Minka head Abdallah Sallam (LinkedIn) as its CEO, according to another filing (pdf) on Monday. He will start his term on Sunday, Katamish said.

Market reaction: MNHD’s shares are off 16% this trading week so far, closing at EGP 2.22 yesterday, down from EGP 2.64 before the long weekend, according to data from Reuters. MNHD’s 52-week high was EGP 3.96.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.