CIRA’s IPO on EGX worth LE 1.2B: Hermes

CAIRO – 1 October 2018: EFG Hermes announced Monday the completion of the initial public offering (IPO) of Cairo for Investment & Real Estate Development (CIRA) on the Egyptian Exchange (EGX) at LE 1.244 billion.

EFG Hermes acted as sole global coordinator and bookrunner on the transaction. Shares of CIRA were admitted to trading on the Egyptian Exchange under the stock ticker CIRA.

Hermes said in a statement that CIRA caters predominantly to the fragmented middle-income segment, offering premium education at affordable pricing. CIRA is also active in the higher-education segment with its Badr University in Cairo (BUC), which houses nine faculties as of 2018.

“We are particularly pleased with this transaction that brings a new, high-growth and underpenetrated sector to the Egyptian capital market through one of Egypt’s largest private sector educational platforms,” Co-Head of Investment Banking at EFG Hermes Mostafa Gad said.

“Egypt’s education space is supported by strong demand and a high growth potential owing to the country’s demographic profile. Meanwhile, the sector’s limited players and underinvestment add up to an incredible investment opportunity as illustrated by our ability to build a solid base of diversified investors,” he added.

It noted that the IPO saw selling shareholders Social Impact Capital (SIC) alongside other minority shareholders offering 207. 26 million shares or 37.8 percent of CIRA to institutional and retail investors at an offer price of LE 6.00 per share.

CIRA’s total market capitalization at the start of trading was LE 3.287 billion. The secondary share sale is to be followed by a closed subscription at the same offer price, wherein SIC will inject a portion of the IPO proceeds into the company by way of capital increase, according to the statement.

The statement also referred that proceeds from the capital increase will be utilized to fund CIRA’s growth strategy, which encompasses both capacity and geographic expansion of its schools, while simultaneously pursuing diversification opportunities particularly in the healthcare space.

“CIRA’s IPO builds on a long tradition of bringing new sectors to the public domain and illustrates our continued role in helping develop regional equity markets,” EFG Hermes’ Co-CEO of the Investment Bank Mohamed Ebeid said.

“Education adds to a roster of firsts by EFG Hermes that includes healthcare and dairy, and is testament to our leadership position in Egypt as a capable partner that can package and market new opportunities to quality investors thanks to unmatched market insights and execution knowhow,” Ebeid added.

Trading on the shares of Cairo for Investment and Real Estate Development (CIRA) started Monday after issuing about 37.84 percent of the company’s outstanding share capital on the Egyptian Exchange (EGX).

After two minutes of the beginning of the EGX session, CIRA rose to reach LE 7.09 per share after trading on 504,375 shares.

By 10:54 a.m., CIRA declined to LE 7 per share, after trading on 32.69 million shares with a turnover of LE 228.7 million.

On September 25, EGX announced that the initial public offering (IPO) of CIRA was oversubscribed by 18.87 times, with purchase orders recording 273.78 shares.
CIRA is a private education provider in Egypt, targeting both the K-12 and the higher-education segments in six governorates.

EFG Hermes is a public company, listed on the Egyptian Exchange (EGX) since February 1999.

It operates within the diversified financial sector, focusing on investment banking and brokerage. It has 36 subsidiaries operating across the Caribbean, Northern Africa, and the Middle East. EFG Hermes is based in 6th October, Egypt and was established in January 1984.