Eastern Co. to raise paid capital to LE 2.25B



Thu, 19 Apr 2018 - 02:53 GMT


Thu, 19 Apr 2018 - 02:53 GMT

Cigarettes - via pixabay/geralt

Cigarettes - via pixabay/geralt

CAIRO – 19 April 2018: The board of Eastern Company approved Thursday to raise the company’s paid capital to LE 2.25 billion, from LE 1.5 billion, with an increase of LE 750 million, a filling to the Egyptian Exchange (EGX) revealed.

The company clarified that the increase of the capital will be financed by the company’s reserves; LE 500 million from its legal reserve which amounts to LE 693.1 million, and about LE 250 million from other reserves that are worth LE 927.8 million.

The extraordinary general assembly approved in March splitting the stock by 1:3 ratio to be valued at LE 5 instead of LE 15.

At the beginning of April, Chemical Industries Holding Company announced that it 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 that the offering of the shares would take place during the current year after finalizing the procedures of the stock split.

Mostafa said that the yield of the offering will be used to finance Eastern Company’s investment plan and other subsidiaries including, 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, referring to the stabilization of the current prices.

Chemical Industries hold 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.

Eastern Co is a public company, listed on the Egyptian Exchange (EGX) since September 1995. It operates within the food, beverage and tobacco sector focusing on tobacco. It was established in July 1920.



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