Act Financial unveils new offering on EGX on July 9th
Updated 7/3/2024 11:37:00 AMArab Finance: Act Financial is planning to raise EGP 1.04 billion in a private placement of 300 million shares on the Egyptian Exchange (EGX) from July 9th to 18th, and an initial public offering (IPO) of 60 million shares until 23rd, Managing Partner and Co-Founder Mostafa Abdelaziz said in a press conference on July 2nd.
This move aims to boost the company’s expansion plan, Abdelaziz noted, adding that the to-be-offered 360 million shares represent 47% of the company’s total shares.
Marking the first offering on the EGX in two years, it is priced at EGP 2.9 per share with a fair value estimated at EGP 4.54 per share, he said, adding that Zilla Capital will act as the offering’s sole manager.
For the first time, the private placement is open for brokerage and securities firms, Abdelaziz stressed, saying that the Arab African international Bank will be the underwriter.
He mentioned that a fund will be launched to keep the share price stable, and it will be 100% funded via proceeds from the public offering.
He also pointed out that the company plans to invest 80% of the offering’s proceeds in acquiring minority stakes in EGX-listed firms and generate returns, stressing that it will not invest in closed companies unless they are listed on the EGX.
Around 100 non-listed companies have been studied, Abdelaziz said, adding that the company qualifies as an investment firm rather than a fund, with an average annual return on investment (ROI) of 50% and a compound annual growth rate (CAGR) of 76.5% from 2020 to 2023.
He noted that the company’s success is not tied to the general performance of the EGX, highlighting that it saw a 106% growth rate during the Coronavirus pandemic.
Additional Guarantees for Stable Share Price
Act Financial’s board has approved the purchase of treasury shares via the open market at a rate not exceeding 10% of the company’s capital for a period of at least one month and no more than 90 days as of the first day of trading on the company’s shares to ensure that the share price remains stable, Abdelaziz confirmed.
The purchase will only be made if the market price of the share falls below the subscription price for those offering to sell their shares, he stated.
In his exclusive statement to Arab Finance, Abdelaziz believes that this is the perfect timing for the offering, as sovereign funds are already announcing future offerings and a number of deals had been concluded recently, including the acquisition of SODIC by UAE’s Aldar Properties and others.
He expressed his confidence in the current market conditions, saying that the company has no plans to exit the Egyptian market.
Future Offerings
Several offerings are expected to be conducted over the coming period, particularly in the real estate and industrial sectors, Zilla Capital’s Managing Moustafa El-Shenety stated.
El-Shenety’s expectation is banking on the stability of the country’s exchange rate and liquidity flows into the local market during the past period, in tandem with the announcement the cabinet’s reshuffle.
Established in 2015, Act Financial is an active investment company that focuses on various investment activities, including acquiring stakes in EGX-listed companies and strategically taking part in acquisitions.
The company’s paid-up capital amounts to EGP 191.4 million distributed over 765.7 million shares at nominal value of EGP 0.25 per share.
Zilla Capital was established in 2018 as an investment bank that engages in non-banking finance, financial advisory, investment banking, and portfolio management.
In 2020, the investment bank acquired the operations of Multiples Group, which operated in the Middle East and North Africa region (MENA).
It is worth noting that last offering on the EGX was for Macro Group for Pharmaceuticals in February 2022, after raising EGP 1.3 billion via a private placement and public offering of a total of 264.5 million shares, or 45.8% of the company’s issued capital, at a price of EGP 4.85 per share, with the participation of 5,600 investors.
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