The Baker McKenzie Cairo Office – Helmy, Hamza & Partners provides legal advice for about 40 deals in several sectors during the current year, amounting to more than 40 deals.
Mohamed Ghannam, the executive partner in the law firm, said that the office is currently working on a number of important deals, which vary between about 25 financing, refinancing, restructuring, and project financing deals, and about 16 merger and acquisition deals and capital increases in several sectors.
He revealed that the office provided legal advice in more than 40 deals that varied between mergers, acquisitions, financing and debt instruments during the past year, the value of which exceeded about $15bn.
Among the most prominent of these deals is the representation of the Ministry of Finance in the first green financing of $3bn with an alliance of international banks, the representation of the National Bank of Egypt, Banque Misr, Banque du Caire, QNB Alahli, and a consortium of banks comprising twenty banks to finance the Evergrow Fertilizer Company project of about EGP 8bn, and as a legal advisor to Banque Misr and the National Bank of Kuwait in a financing of $110m for Orange Company, and the representation of the financing banks in a huge financing for the Delta Sugar Company.
The office also provided legal advice to Rawasi Company in a joint project between the National Bank and Banque Misr related to real estate assets in Madinaty compound owned by Talaat Moustafa Group at about EGP 9bn, in addition to a number of acquisition deals, led by FICA “Swiss Building Materials” in its acquisition of Master Builders in an international deal exceeding €5bn.
He added that the world has witnessed multiple and unexpected crises, starting with the consequences of the Coronavirus crisis, the repercussions of the Russian-Ukrainian war, the wave of global inflation, the rise in interest rates globally by central banks, and the regional political conditions surrounding Egypt, all of which had a negative impact on the economies of the world as a whole, including the Egyptian economy.
Ghannam explained that the huge investments that have been made in infrastructure projects in recent years are very important and there was an urgent need for them, because no country can naturally advance without a network of modern and safe roads, power and energy stations, ports, and investments in railways and public transport that serve the citizen and the economy. and movement of goods.
He believes that in order to achieve comprehensive economic growth, it is necessary, in conjunction with these investments, to review and purify all governmental procedures, which hinders the movement of capital and pumping it into the arteries of the economy, which is directed to alternative opportunities in other countries. On the other hand, some procedures do not achieve real benefit, and therefore they must be rationalized as necessary to protect national security and protect customers, but without exaggeration, because many measures do not achieve the public interest and lead to the loss of valuable opportunities for the national economy and an increase in the cost of investment in Egypt.
The Egyptian government announced at the end of last February its intention to offer shares in about 32 companies over the course of a full year, whether the offering will be public through the stock exchange, to a strategic investor, or both.
He added that the approach adopted by the Egyptian government in accelerating the program of government offerings and transferring the ownership of some companies and assets to the private sector and the state ownership document is in the right direction, which is witnessing an acceleration in the recent period and has begun to achieve tangible results, and it is not only for the management of foreign currency, but it is consistent with the general strategy to increase the role of the private sector, which is vital and will achieve tangible results in terms of creating job opportunities, increasing tax revenues, and increasing export and growth rates.
He attributed this to the fact that the private sector is the most efficient in managing and operating assets, and the excessive fear of increasing the role of the private sector is unjustified, and this is compared to economies that have achieved growth spurts such as China, India, Vietnam, Eastern European countries, and others.
Regarding fair evaluations of deals, he added: “For companies listed on the stock exchange, this does not represent a major problem, but with regard to companies or other assets, the issue of evaluation needs to unify the entity and procedures and seek the help of international houses of expertise to reach the fair value without complacency or exaggeration, and that sometimes it is the conditions and timing of the market are an influential factor, and that the markets do not wait for anyone, meaning that postponing deals in the belief that the markets will improve in the future is not necessarily the best available option.”
He pointed out that Baker & McKenzie represented the Sovereign Fund of Egypt in establishing its sub-fund for pre-IPOs, which is a modern model whose strategy is based on allocating part of the companies that are planned to be offered on the stock exchange for sale to strategic investors or sovereign funds before the offering, which maximizes the value of the company and gives it great credibility upon offering. It reflects positively on its value and creates immediate hard currency liquidity.
In June 2022, the Sovereign Fund of Egypt established a sub-fund through which the shares to be offered to investors will be prepared through the Governmental IPO Committee, with a portfolio value ranging between $5bn to $6bn, and it has the right of the agency to manage the issuance of shares, and the first shares that will be managed are the shares of the National Investment Bank in a number of public sector companies.
Ghannam stressed that the biggest elements of attraction for investment in any country are the clarity of laws and regulations, their non-continuous change, and the ease and simplification of the applied rules to allow for freedom of investment and economy, as well as investing in the digital transformation of the government and administrative bodies, modern technology, mechanization, and attention to the justice system, because the rule of law and its enforcement in effective and decisive ways are among the biggest incentives for investment in any country. Therefore, attention must be paid to the administrative system in courts and enforcement agencies.
