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Reuters/Cairo
Egypt’s Arabian Cement Company plans to hold international presentations from next week aimed at attracting investors to a stock market debut that would be the first in Cairo since the fall of autocrat Hosni Mubarak in 2011.
Chief executive Jose Maria Magrina told Reuters the firm was looking to float a stake of between 22.5% and 30%. “Our target is the 14th of May to start trading ... but that may change ... It depends on the result of the roadshow,” he said yesterday.
After three years of turmoil, Egypt is in the midst of a political transition that could see a new president elected by early June. The army ousted the country’s first elected leader Mohamed Mursi last July after mass protests against his rule.
Former army chief Abdel Fattah al-Sisi, who led Mursi’s removal, is widely expected to win the election as he has gained support among the public hoping he can bring stability to the most populous Arab nation.
“We believe that this is the right time ... the country is now going through a second renaissance,” Magrina said. “We want to capture this ... We think that this excitement will help the company and the stock exchange to perform better.”
Magrina said Arabian Cement’s capital was worth around 757mn Egyptian pounds ($109mn) and the initial public offering (IPO) would see Egyptian shareholders sell down some of their stakes. He did not identify the investors.
The group has production capacity of 5mn tonnes a year and a market share of around 8%, Magrina said.
EFG-Hermes has been mandated to advise on the IPO.
Political and social unrest over the past three years have driven investors away and increased the pressure on Egypt’s cash-strapped government, which is facing an energy crisis.
The government is struggling to meet soaring energy bills caused by high subsidies on fuel products and has been cutting back on natural gas supplies to cement factories. It is considering permitting cement firms to use coal for production.
Last year, Arabian Cement only received 76% of the gas it needed for its 5mn-tonne a year facilities. It was only able to produce and sell about 4mn tonnes as a result.
While many companies halt production during energy cuts, Arabian Cement has chosen to invest in alternatives.
It currently relies on gas for 90% of production, but hopes to increase its capacity from renewable energy by the end of this year from 10% to 30%.
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