CAIRO: Naeem Holding board of directors decided to take initial steps to acquire a controlling stake in Naeem KSA ranging between 75-80 percent of the company’s overall capital.
The company announced that the acquisition is to take place at a price-to-earnings ratio (P/E) of five times relative to the normalized earnings of Naeem KSA achieved in 2008.
“The deal will be concluded after applying all due diligence for evaluating Naeem KSA, said engineer Hany Tawfik, head of Naeem Holding’s executive committee.
“Accordingly, Naeem Holding board of directors retraced its decision taken in May 2007 to increase the company’s paid-in capital from $240 million to $320 million, i.e. 80 million shares at $1 par value per share. These proceeds were to finance expansions in the Gulf area, he said.
Instead, sale proceeds of Naeem Holding’s stake in Egypt’s Al Watany Bank, which amounts to more than $100 million, will fuel the acquisition of Naeem KSA. “The board’s decision to cancel the capital increase was mainly to protect shareholders’ rights by eliminating the most expensive source of capital raising with its associated costs, said Tawfik.
“Consequently, Naeem has decided to use its internal sources, dominated by the sale process of Egypt’s Al Watany Bank, in financing the acquisition. This doesn’t prevent the possibility of raising capital through stock dividends, given the approval of the company’s general assembly.
Commenting on the company’s intention to implement its global deposit receipt (GDR) program on London Stock Exchange (LSE), Tawfik said, “the program is sponsored by the Bank of New York Mellon, as part of shareholder diversification and enhancement plan for Naeem Holding through giving European-based investors the possibility to invest in Naeem Holding directly through LSE’s over the counter market.
