Sidi Kerir Petrochemical Company (SIDPEC) is set to complete its acquisition of the Egyptian Company for Ethylene and Derivatives Production (ETHYDCO) by the end of next October, according to informed sources who spoke to Daily News Egypt.
The sources said that the deal is awaiting the approval of SIDPEC’s general assembly of shareholders, which is expected to convene within three weeks. After that, the merger process, the ownership structure amendment, and the share transfer will take place within the following two weeks.
The sources also said that the acquisition will not be affected by Abu Dhabi Holding’s purchase of a minority stake in ETHYDCO, which was announced by the government last July. The Abu Dhabi fund will transfer its shares to the new entity according to the swap transactions that have been agreed upon and will have representation on the board of directors of the new entity.
Abu Dhabi Holding acquired 27% of ETHYDCO at a value of $280m, as part of a deal that also included stakes in National Drilling and Elap, according to sources who told Daily News Egypt at the time.
Last July, SIDPEC announced that its fair value at the end of December 2022 was about EGP 23.13bn, distributed over 756 million shares, with an average fair value per share of EGP 30.6 based on the report of the financial advisor prepared by Baker Tilly Consulting.
The source added that ETHYDCO’s fair value at the end of the same period was $1.08bn, distributed over 13.86 million shares, with an average fair value per share of $78.32.
The exchange rate was calculated based on EGP 30.9 to the dollar, making ETHYDCO’s fair value about EGP 33.54bn.
According to these values, the share swap ratio is about 1.4 shares of SIDPEC for every share of ETHYDCO.
