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Tuesday, 18 January 2022

Nahr Elkhair shares could begin trading on the EGX this week -Omran

IPO WATCH- Nahr Elkhair Development and Investment’s shares could begin trading on the EGX this week, Al Borsa quoted Financial Regulatory Authority chief Mohamed Omran as saying at a presser yesterday. The company will offer shares to investors at EGP 0.25 a piece and is valuing itself at EGP 500 mn, according to the public subscription notice (pdf) published yesterday. Nahr will sell as much as 61.5% of its shares on the bourse, potentially giving the IPO a transaction value of c. EGP 307 mn.

About the company: Nahr Elkhair is an agricultural company with a footprint in environmental services, livestock, land reclamation and agricultural investment. The company is chaired by Ahmed Mohamed Rafqy Abdel Rahim, while Ahmed Mohamed Sayed Gamea is managing director. Gamea is a major shareholder in the firm, holding a 40% stake.

Financials: Nahr Elkhair generated a net income of EGP 7.4 mn in 2020 on revenues of EGP 61.7 mn. This is up from 2019 when earnings came in at EGP 3.5 mn, and 2018 when it EGP 1.3 mn in net income.

Forecasts: The company’s projected earnings for 2021 are EGP 20.9 mn. It is targeting an EGP 34.9 mn bottom line in 2022 and EGP 185.8 mn by 2026, the filing suggests.

Advisors: Osoul Arabia Investment and Financial Consultancy is providing financial advice while Helmy Hamza & Partners is legal counsel.

WHAT’S NEXT ON THE IPO FRONT? Omran said that Macro Group is on track to complete its IPO before the end of the month. The cosmeceutical firm, whose shares were listed on the EGX last week under the stock ticker MCRO.CA, has a 23 January deadline to begin trading its shares but can request an extension. Football club Ghazl El Mahalla is preparing to go public next month, while non-bank financial services outfit Ebtikar has also signaled it is looking to IPO. Our friends at the parent company of healthy foods brand Abu Auf are looking to offer as much as 49% of their company for sale in a transaction that could take place in 2Q.

What about military-owned companies? Senior officials including Prime Minister Moustafa Madbouly have recently noted the Sisi administration’s plans to sell stakes in a number of military-owned companies. Bottled drinks firm Safi and Wataniya Petroleum could both sell shares to strategic investors ahead of possible IPOs — they’re two of 10 military-owned firms the Sovereign Fund of Egypt is lining up to attract private capital. Separately, our friends at the SFE are guiding high-level talks on plans to sell stakes in three Siemens-built power plants in a process that could also involve a mix of sales to anchor investors as well as future offerings via public markets.

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