Cleopatra Hospital will start promoting its initial public offering (IPO) in mid-May, said the vice president of investment company EFG-Hermes’s promotion sector, Mohamed Abou Samra.
The company disclosed in a press release last Thursday that the beginning of the private and public IPO procedures is for a maximum of 40m shares out of the hospital’s capital shares. This number represents 25% of the total equity capital of the hospital, which is registered in the Egyptian Exchange (EGX) under CLHO.CA.
The plan for promoting the private IPO includes attracting financial institutions and investors with high solvency from the Gulf markets and Dubai in particular, in addition to the markets of South Africa, London, and the United States, Abou Samra said.
The company targets collecting EGP 500m to 600m from the IPO in the EGX, he said.
From the outcome of the targeted IPO and the number of shares scheduled to be offered, the final price of the share is expected to range between EGP 12.5 to 15.
Abo Samra explained that the maximum limit of share offering prices will only be a trial price, as the final one will be decided during the private offering segment for investment institutions and individuals of financial solvency through recording the IPO orders for a specific price according to the book building system.
Afterwards, the share is offered to the public offering segment in the Egyptian market at the same price as the private offering segment.
The goal is to distribute the offering of 40m shares across both the private and public offering segments as such: 34m shares to the private offering segment and 6m shares to the public offering segment.
The Cleopatra offering is considered a medium-sized offering compared to recent ones in the EGX whose value exceeded EGP 1bn, such as Domty, Edita Food Industries, Emaar Misr, and Orascom Construction.
The offer’s conclusion will benefit Cleopatra by increasing the company’s capital with the issue of 40m shares, the maximum shares for a main shareholder.
Care Healthcare Ltd. is considered the main shareholder in Cleopatra hospital with 99.99%.
The structure of Care Healthcare Ltd’s shareholders includes a group of investors and international financial institutions, including Abraaj NAH Limited with 72.4%, the European Bank for Reconstruction and Development (EBRD) with 12.5%, the German Investment Corporation (DEG) with 7.55%, and the French Development Agency PROPARCO (AFD) with 7.55%.
Director of Investor Relations at Cleopatra Hospital Hassan Fikry said the company seeks to finalise the prospectus of the IPO with the Egyptian Financial Supervisory Authority (EFSA). The report prepared by the independent financial advisor is currently being reviewed to set the maximum offer price per share.
The approval is likely to be received within days, in preparation for beginning the promotion, Fikry said.
Chief executive officer Ahmed Ezzeldin said the company intends to employ the proceeds to supporting and financing the capital expenditures of the planned expansions at Al-Shorouk and Cleopatra hospitals, as well as purchasing a plot of land in New Cairo to establish a new hospital.
The company aims to establish clinics in the new urban communities for increased presence on the local level by expanding outside Greater Cairo, Ezzeldin said.
Cleopatra set up an account to support and stabilise the share price following the IPO, which will include 15% of the IPO proceeds.
Cleopatra’s paid-up capital is worth EGP 80m and is divided across 160m shares with a price of EGP 0.5 per share.
The company traces its roots back to 1976 and consists of four hospitals: Cleopatra Hospital, Cairo Specialized Hospital, Nile Badrawi Hospital, and Al-Shorouk Hospital in greater Cairo.