Qalaa Holdings, one of Egypt’s largest investment firms, said on Tuesday it had signed agreements with Financial Holdings International (FIH) to buy some of FIH’s subsidiaries.
The move is designed to divest multiple non-core platforms and reduce consolidated debt.
Under the terms of the agreements, Qalaa will simultaneously sell to FHI, one of its major co-investors, its holdings in several non-core business units.
Qalaa said in a statement it aims to close the transaction in December 2015 and that it would result in the reduction of its consolidated debt by about EGP800 million ($105 million).
“The stakes Qalaa is acquiring are in companies that have leading positions in the energy, cement and transportation sectors, among others,” it said.
Qalaa will acquire FHI’s stakes in cement group ASEC Holding, energy distribution company TAQA Arabia and Mashreq, freight forwarding and logistics provider Nile Logistics, food retail chain Dina Farms Supermarkets, and cement industry consumables producer United Foundries.
In return it is selling to FHI its stakes in MENA Homes, Grandview and Dina Farms Land Companies. Dina Farms Land Companies will be spun-off from existing investments.
Qalaa will have majority stakes in the companies it is buying post transaction and zero stakes in the ones it is selling.
“Deleveraging is a key strategic goal for the company in 2015 and onward,” said Qalaa.
Qalaa raised $100 million by selling assets last year and the planned disposal of eight assets in 2015-16 is expected to bring in about $250 million, allowing the company to focus on core investments at home and abroad in energy, transport, agrifoods, mining and cement, the firm’s managing director told Reuters in May.
Source: Ahram Online