CAIRO: A private offering in Egypt’s Juhayna Food Industries, part of a plan to raise about LE 1 billion ($176.5 million), was 1.75 times oversubscribed, the financial adviser said on Sunday.
The private placement involves 80 percent of 206 million new shares being offered. The remaining 20 percent of shares are being offered to the public in Egypt’s first initial public offering (IPO) since 2008.
Karim Awad, head of investment banking at EFG-Hermes, which advised on the placement, said the private offering was priced at LE 4.90 and this meant that effectively the public tranche would be priced at LE 4.66.
Based on the roughly 165 million shares offered in the private placement, Juhayna would have raised about LE 808 million and the public offering of the about 41 million shares would give it up to another LE 192 million.
The total offering represents 39.6 percent of the firm’s capital. The firm had initially set an upper limit of LE 5.64 per share in the offering. If it had achieved that price it would have raised LE 1.16 billion.
"On the private placement, we got all the orders, and we priced according to that price range. We closed the private placement earlier this morning [Monday]."
The public subscription closes on Thursday and results would be announced to the stock exchange on Monday, the firm said.
The global financial crisis put a stop to IPOs in Egypt after oil services company Maridive and real estate company Palm Hills Developments sold shares in mid-2008.
"The IPO will help finance future expansion projects, helping the company grow in the food production industry," Juhayna Chief Executive Officer Safwan Thabet was quoted as saying by Al-Akhbar newspaper.
"The capital increase is not intended to pay any debt or as a result of the recent fire in one of our six factories, but to allow us to enter new investments in dairy production and to plug the current gap between the size of our production and our land reclamation projects," he said.