The Egyptian government plans to sell its entire share (32.9%) in Al-Ezz Dekheila Steel Company (EZDK). The stake is owned by several government agencies, including Banque Misr, the National Bank of Egypt (NBE), and the National Investment Bank (NIB).
Hala El-Said, Minister of Planning and Economic Development, said that the government will sell its stake in the company for the private sector at $241m (60% of the deal will be paid in dollars and 40% in Egyptian pounds).
The board of directors of the Al-Ezz Dekheila agreed to voluntarily delist the company’s shares from the Egyptian Exchange (EGX), while purchasing the shares of those affected by the voluntary delisting at a price of EGP 1,250 per share.
Informed sources told Daily News Egypt that the company plans to finance the deal through a loan obtained from several Emirati banks at a value of $125m, provided that the company gives up the dollars to local banks, in addition to another part of the deal that will be financed from the company’s cash.
The sources indicated that the Al-Ezz Steel Group owns about 64% of the Al-Ezz Dekheila Steel Company. The government, represented by a number of entities, owns about 32.9%, with a value of up to EGP 8bn. Small investors own 3%, with an expected total value for the entire deal amounting to EGP 8.8bn.
The sources added that the government will exit the voluntary delisting process, and that Ezz Steel will not buy any shares. Al-Ezz Dekheila will buy its shares in a process similar to buying treasury shares.
The share of Al-Ezz Dekheila jumped 20% on the stock market on Tuesday, with a turnover of EGP 10.6m, on 10,800 shares.
The delisting process will be carried out after the approval of no less than 75% of the company’s shareholders in the general assembly scheduled to be held on August 5 is obtained. It’s worth noting that the door will be open for one month for the company’s shareholders to exit from shares, according to the sources.
The company’s board of directors agreed that the purchase price of the shares of those affected and those who do not wish to continue with the company will be based on a price of EGP 1250 per share, which represents a premium of 52.4% over the market price of the share, and a premium of 38.6% over the average closing price of the share during the past three months.
Al-Ezz Dekheila Steel Company turned to a loss of EGP 2.35bn during the first quarter of this year, compared to a net profit of EGP 1.19bn in the first quarter of 2022. The company’s sales increased to EGP 25.03bn during the first quarter of this year, compared to sales of EGP 17.16bn in the comparative quarter of 2022.
