The Egyptian Financial Supervisory Authority (EFSA) approved Alexandria Cement’s E£2.45bn rights issue on Thursday, a final green light needed to raise capital.
The company said in June the one-month rights offer, which closed on June 20, was 99.43 per cent subscribed but it needed the EFSA’s consent to sell the remaining shares.
The rights issue was designed to pave the way for the company’s main shareholder, Greek cement maker Titan, to sell a 16 per cent stake to the International Finance Corporation (IFC) for EUR80m.
Titan has been struggling to cope with a shrinking business and to cut debt. Business in Egypt is expanding and is the firm’s only growth market.
The company will use the proceeds of the rights issue to buy 95 per cent of another Egyptian cement maker, Beni Suef Cement Co, which is also owned by Titan.
Alexandria Cement will pay Titan E£3.13bn for the stake, which will increase Alexandria’s total stake in Beni Suef to 99.998 per cent.
It will not pay Titan for the Beni Suef shares in cash, but will book it as an outstanding debt to Titan.