Egyptian private equity firm Citadel Capital has begun consolidating its businesses after spurts of rapid growth, yet still plans an initial public offering (IPO) of one of its companies, its chairman said.

Since its founding in 2004, Citadel has expanded quickly to control investments worth $8.3 billion, mainly in the Middle East and Africa, through a series of platform companies.

“Our concentration now is focusing on our existing investments, making sure that they’re performing to their maximum possibilities,” Chairman Ahmed Heikal told the Reuters Middle East Investment Summit in Cairo.

Until about the end of 2011, the company planned “to make very small incremental investments in those businesses, to debottleneck their capacity, to add small capacity,” he said. “These are very small investments that generate a lot of money.”

Citadel is looking to offer new shares in one of its companies, electricity and natural gas distributor Taqa Arabia, in an IPO before June.

The new funds would help Taqa, which also generates electricity, to expand its business in Egypt and elsewhere in the region, he said. The IPO could raise around $175 million, depending on the percentage stake sold and the price.

Citadel, whose stake in Taqa is 33-34 percent, had broached the idea last January of a Taqa IPO on Egypt’s exchange.

CONSOLIDATION
Citadel underwent an earlier period of consolidation from August 2007 until October of last year, but then began a series of major transactions that lasted until March.

These included formation of a solid waste management firm in Egypt, the purchase of an indirect stake in Rift Valley Railways in Kenya and Uganda and the expansion of Wafra, a platform company for investments in northern and southern Sudan.

Citadel recently put together a $2.6 billion debt package for Egyptian Refining Co, which is building a $3.7 billion oil refinery in Mostorod in northern Cairo. Construction will begin as soon as the loan is closed, probably by year-end, Heikal said.

Citadel listed its own shares on the Egyptian stock exchange in November.

Heikal said the individual companies in its portfolio would continue to expand even as Citadel itself paused to take stock.

(Source: Reuters)