GB Auto not ruling out stake sale to investors in private placement

Elsayed Solyman
2 Min Read

GB Auto will not rule out the possibility of a stake sale to investors in a private placement, if any good investment opportunity surface, Raouf Ghabbour, chairperson of GB Auto, exclusively told Daily News Egypt on the sidelines of the fourth annual Egypt Automotive summit on Sunday.

“We are considering all investment opportunities, including selling a stake to big investors in a private placement,” he confirmed.

A private placement is a capital raising event that involves the sale of securities to a relatively small number of select investors.

Investors involved in private placements can include large banks, mutual funds, insurance companies, and pension funds.

A private placement is different from a public issue, in which securities are made available for sale on the open market to any type of investor.

In mid-November, Raouf Ghabbour sold 276,685,102 shares to RG Investments—a company fully owned by Ghabbuor’ family—from his stake, to exit GB Auto at EGP 899.2m.

The company said, in a statement sent to the EGX, that transferring GB Auto shares owned by Raouf Ghabbour to RG Investments is merely an estate planning for the family’s investments.

When asked about splitting the company’s activities and separating the auto industry, he replied, “this is not available at the current stage. But, we study all options to develop our business.”

Ghabbour also believes that his company would turn to profitability in 2018, as market conditions are expected to improve.

In the first nine months between January and September, the automotive maker logged consolidated losses of EGP 475.46m against EGP 184.89m in profits in the same period of last year.

In the third quarter of 2017, company losses hit EGP 141.1m against EGP 47.02m in profits in the corresponding period of 2016, according to a filing to the EGX.

Meanwhile, stand-alone results for the nine-month period showed losses of EGP 533.5m.

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