CAIRO: Real estate developer Talaat Mustafa Group (TMG) will offer 295 million ordinary shares in an IPO scheduled to start on Nov. 9.
The new shares are expected to be offered at LE 10 to LE 13.91 per share in the IPO, supposedly a five percent discount to the price in the private placement.
TMG had revealed plans to raise up to $750 million in a private placement and an initial public offering. According to news reports, the company is raising $400 million to $500 million through the private placement and $200 to $250 million through the IPO.
“Over the last 20 years, TMG has built an unparalleled reputation for high quality, large scale developments within Egypt, said Hisham Talaat Mostafa, executive chairman, in a press statement. “The economic background for our business is expected to remain buoyant, and we intend to take part in this growth fully. For this reason, we look forward to presenting our exciting prospects to investors across the world and hope that they will share our confidence in the future.
TMG develops large-scale city and community complexes, mainly located on the outskirts of Cairo. It also develops hotel complexes which include residential apartments and/or villas and, in most cases, office spaces and shopping areas.
The company’s largest development to date is “Madinaty, which comprises a land area of 33.6 million square meters with a proposed residential capacity of 600,000 people. Sales commenced at “Madinaty in 2006 and the project is expected to complete in 2023. TMG is also the sole-developer of Al-Rehab and Al-Rabwa residential projects.
Moreover, the company is active in the development of hotels and resorts. It currently has three hotels in operation: the Four Seasons Sharm El-Sheikh, the Four Seasons Nile Plaza and the San Stefano Grand Plaza. TMG has other two hotels under development: the Nile Hotel expected to open in 2008 and the Marsa Alam Hotel
In preparation for the share sale, financial advisers Grant Thornton valued the existing company at LE 25.3 billion ($4.62 billion), equivalent to LE 13.91 for each of the existing 1.8 billion shares. The company announced that proceeds of the offering would be used to fund current and potential projects in Egypt and the region.
EFG-Hermes and HSBC bank have been appointed as joint global coordinators and joint book-runners for the offering.