Catalyst Partners and Sigma Capital will launch an IPO for 1.25m shares, 27.6% of MB For Engineering and Contracting’s shares, on the Nile Exchange (Nilex) for small- and medium-sized enterprises (SME).
The price set per share is EGP 5.95, totalling EGP 32.8m, managing director of MB Ahmed Bahaa Shalaby said during a press conference on Monday. Shalaby said his company achieved revenues of EGP 91m in 2015 and expects that to increase to EGP 120m this year, compared to only EGP 68 in 2014.
MB also targets a net profit of EGP 12m in 2016 following the IPO, compared to EGP 7.6m in 2015.
The company will use revenues from the IPO to raise production efficiency to develop its products and become the largest manufacturer and distributor of electric panels in Egypt and Africa; the IPO will activate the company’s strategy to cover the local market and expand to foreign ones. MB has partnerships with companies such as Hyundai, Shalaby said.
He added that MB will manufacture all kits and components locally rather than importing them from abroad. The company owns a 4,000 sqm factory for the manufacture of electrical panels in Sadat city, with a storage capacity of up to 4,500 metres.
Head of investment banking at Catalyst Partners, the company that will promote MB’s IPO, Abdelaziz Abdel Nabi said the paid-up capital of the company stands at EGP 20m with a nominal value of EGP 0.5 per share.
Sigma Capital Head of Research Mohamed Waked noted that Sigma estimated the price per share at EGP 7.20.
Chairman of Catalyst Partners Aly El Tahry said the time is “right” for the IPO, especially following new reforms in the currency rates.
According to Managing Director of Sigma Capital Mohamed Hammam, the promotion of the IPO begins in Zagazig, Mansoura, Alexandria, and Sohag on 22 March, to end with a conference in Cairo on March 29.
This will be the first time for such a campaign to begin in the outer governorates, Hammam pointed out. He noted that MB currently has 20m shares, which will be boosted to 42m shares after the capital increase.
The IPO procedures will begin on Wednesday 30 March and continue through Thursday 31 March. The trading begins on the Egyptian Exchange on 5 April.
Cairo Financial Holding is the financial adviser, while Sarie El-Din & Partners are acting as the legal adviser. Mubasher International and Arabeya Online Brokerage are assisting with the management of the IPO.
MB For Engineering and Contracting was established in 1981. It operates in the field of manufacturing, assembly and distribution of low-voltage electrical products. The company is one of the leading suppliers in the Egyptian market.