DUBAI: Egyptian private equity firm Citadel Capital has won clearance to ask shareholders to approve a capital increase, it said yesterday, a sign of increasing confidence in the country’s financial markets.
If the 3.64bn Egyptian pound ($528m) share issue goes ahead, it will be one of the biggest capital raising in Egypt since its 2011 revolution.
Citadel, which has struggled with losses over the past two years, originally requested regulatory approval for the share sale last year.
But like many business plans during the administration of Islamist President Mohammed Mursi, the sale did not go ahead because of bureaucratic obstacles and poor market conditions. Mursi was ousted by the army after popular protests in early July.
The new military-backed government, which aims to rule until elections and a return to democracy next year, has pledged to run the economy more efficiently. The stock market is up more than 15 percent since Mursi’s ouster.
Under Mursi, “there was complete paralysis, no opportunities, no approvals. It was a very difficult environment to do business, even for plain-vanilla transactions,” Hisham El Khazindar, co-founder and managing director of Citadel, said by telephone.
“Now you start to see some movement ... Egypt is open for business again.”
The company will hold a shareholders’ meeting to propose issuing 182.1 million preferred shares and 546.3 million common shares at a par value of 5.0 Egyptian pounds, raising its total number of shares to 1.6bn and paid-in capital to 8bn pounds.
The money raised would be used to boost Citadel’s ownership to between 51 and 100 percent in most of the major companies in which it invests, particularly in the energy, transport, agriculture, mining and cement sectors, it said.
Reuters
