Chemical Industries to offer 4% of Eastern Co. on EGX

CAIRO – 2 April 2018: Chemical Industries Holding Company seeks to increase the percentage of the free-trading shares of its subsidiary, Eastern Company, by 4 percent within the framework of the state’s initial public offering (IPO) program.

Chemical Industries Chief Executive Officer Emad el-Din Mostafa expected the offering of the shares to take place during the current year after finalizing the procedures of the stock split.

On the sidelines of the Pharos Holding Conference, Mostafa said that the yield of the offering will be used to finance Eastern Company’s investment plan and other subsidiaries, El-Nasr and El-Delta companies, to add other production lines.

El-Delta Company plans to execute the new project with an investment of ‎€300 million ($368.7 million), Mostafa clarified.

Regarding the negotiations of cigarette prices, Mostafa said that there are no negotiations currently, referring to the stabilization of the prices nowadays.

Chemical Industries holds a 55-percent stake in Eastern Co, and the remaining 45 percent stake is distributed over retail and institutional shareholders.

The state’s IPO program comes in light of the economic reform program adopted by Egypt and is conducted under the supervision of the Ministry of Investment.

It covers a period of three to five years, aiming to offer partial stakes in some state-owned companies on the stock exchange (EGX). It will serve as a main tool to attract local and foreign capital flows to Egypt.

The state's program seeks to float some state-owned companies in the EGX under a five-year program. It also aims to increase funding to Egyptian companies and maximize the benefit from state assets.

The first phase of the program will include five companies in the petroleum sector, including Enppi, Assiut Oil Refining Co (ASORC) and Alexandria Mineral Oils Company (AMOC), in addition to six companies in the petrochemicals sector, including Sidi Kerir Petrochemicals Co and the Egyptian Ethylene and Derivatives Company, and three companies in the logistics sector.

As for financial services, the listing will include the Housing and Development Bank, Bank of Alexandria, Banque Du Caire, e-finance and Misr Insurance companies, according to the statement.

The real estate sector will have two companies listed, while the customer services and industry sectors will each have one company listed.