ASEC Cement, a subsidiary of Egypt’s Qalaa Holdings, said Sunday it is to sell its entire stakes in ASEC Minya and ASEC Ready Mix to Misr Cement (Qena) for 1 billion Egyptian pounds (US$125 million).
Qalaa Holdings said in a statement that its business unit ASEC Cement signed a sale and purchase agreement for the sale of its holdings in subsidiaries ASEC Minya Cement and ASEC Ready Mix Co., representing 46.5 percent and 55 percent, respectively — to Misr Cement Qena.
Financial close shall take place on or before November 20th 2015. Qalaa Holdings and its subsidiary National Development and Trading Company (NDT) own 70 percent of ASEC Cement.
ASEC Minya Cement is an Egyptian cement producer located in Upper Egypt which commenced commercial operations in August 2013 with a name plate capacity of 2.0 million tons per annum. Meanwhile, ASEC Ready Mix is a producer and distributor of ready mix concrete, the company operates 6 batch plants in Upper Egypt with production in FY14 reaching 382 thousand cubic meters.
In addition to the Qalaa sale proceeds, the sale of ASEC Minya & Ready-mix will help accelerate the delivery of Qalaa’s strategy, with a key element being deleveraging at the holding and platform company levels — a total of 940 million pounds in debt will be deconsolidated at the ASEC Cement consolidated level owing to the transaction. Qalaa reiterates its commitment to its FY15 strategy, with its key elements being deleveraging at the holding and platform company levels; acquisition of additional stakes in key platform companies; selective investments within existing platform companies; and share buybacks so long as these trade at a significant discount to their fair market value.
“Both ASEC Minya and ASEC Ready Mix have established themselves as critical players in the vital Upper Egyptian market thanks to the exceptional dedication and hard work of its management team. While we are happy to have built both companies, this exit allows us to achieve our objectives in an expedient way,” said Qalaa Holdings Founder and Chairman, Ahmed Heikal.
Qalaa Holdings retained CI Capital Investment Banking as Financial Advisor and Arab Legal Consultants (ALC) as Legal Advisors.
