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Sunday, 12 December 2021

Abu Qir raises EGP 2.25 bn in secondary offering

Abu Qir Fertilizers completed the sale of 10% of its shares for EGP 2.25 bn (c. USD 143 mn), according to a statement published on the bourse (pdf) on Thursday. The company’s long-awaited secondary offering on the EGX was priced at EGP 17.80 per share, valuing Abu Qir at EGP 22.47 bn.

Abu Qir’s stock price surged on news of the sale, rising by the maximum 20% during a single trading session on Thursday to close at EGP 22.11. The company is now the second-biggest listed company by market cap, valued at EGP 27.9 bn.

Who sold? The National Investment Bank, the largest shareholder, reduced its stake from 24.9% to 21.5%, selling 42.4 mn shares (disclosure, pdf). The Industrial Development Authority’s stake went down from 12.7% to 10.1%, after it sold 32.7 mn shares (disclosure, pdf), Al Ahly Capital Holding’s shares went from 7.2% to 4.2%, after it sold 37.9 mn shares (disclosure — pdf), and the Chemical Industries Holding Company sold down its stake in the company to 5.5% from 6.5%, selling 13.2 mn shares (disclosure, pdf).

Who bought? Local institutional players as well as regional and international frontier emerging markets specialists, joint financial advisor and bookrunner on the issuance Renaissance Capital said in a statement.

Solid earnings: Abu Qir reported a 30% rise in net income during FY2020-2021, and saw its quarterly earnings almost double to EGP 1.3 bn in 1Q2021-2022, which it attributed to higher international prices and strong demand.

More to come: State-owned Ghazl El Mahalla FC is also set to become the first publicly-traded Egyptian football club on the EGX in a “micro-IPO” within two weeks, according to Public Enterprises Minister Hisham Tawfik. The club expects to raise EGP 135 mn from the sale, which will see it list up to two-thirds of its shares on the bourse.

BACKGROUND: Abu Qir had pushed back the secondary stake sale several times since first announcing it in 2018. The offering suggests the long-dormant state privatization program is in full swing after state-owned E-Finance concluded one of the EGX’s biggest IPOs in years in October.

ADVISORS: EFG Hermes, CI Capital, Al Ahly Pharos and Renaissance Capital acted as joint financial advisors and bookrunners on behalf of Abu Qir’s selling shareholders, with NI Capital acting as program consultant.

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