The capital gain on the recent 24% stake sale of Aman for Non-Banking Financial Services (ANBFS) to the National Bank of Egypt (NBE) could amount to about EGP 400m, a source has exclusively told Daily News Egypt.
The total value of the acquisition stands at EGP 480m, with the cash from the capital gain likely to be received this month.
A portion of the proceeds could be used to distribute dividends, which remain up to the Board of Governors to decide, the bulk of which should be used to reduce leverage. The net debt at Raya Holding, ANBFS’ mother company, amounts to around EGP4.5bn.
The source added that following the secondary share sale, ANBFS will have a capital increase of EGP240m, raising its total capital to EGP615m, with all shareholders, including RAYA, to retain their stakes. RAYA has issued the IFA report valuing ANBFS at EGP 1.76bn, amounting to EGP 46.8/share.
ANBFS has three main arms: Aman for Financial Services; Aman for Microfinance; and Aman for E-Payments. The valuation break-down means that: Aman for Microfinance has a value of EGP 791m; Aman for Financial Services has a value of EGP 436m; and Aman for E-Payments has a value of EGP 501m.
As for Aman for E-Payments, the valuation of EGP501m was agreed upon by both parties prior to the novel coronavirus (COVID-19) outbreak, hence the valuation could have been much higher had it been reviewed again in 2020.
The company has about 95,000 points of sale (POSs), taking in total sales estimated at EGP 10m-EGP 11bn in 2020, and with the likelihood of recording a small profit in 2020.
Aman for Microfinance has a total portfolio of EGP 1.1bn, a share capital of EGP 150m (lending can extend up to 10x) and is currently making profits. Aman for Financial Services boasts a portfolio size of EGP 750m and a share capital of EGP 25m, but is currently making losses.
ANBFS has multiple initiatives in the pipeline for 2021, including the expected Financial Regulatory Authority (FRA) approval for a new securitisation licence in the first quarter (Q1) of 2021.
It is also expected to set up a second consumer finance company, in addition to another small- and medium-sized enterprise (SME) financing entity. ANBFS is looking to list on the Egyptian Exchange (EGX) in the near future.