Egypt’s Alexandria Cement said on Tuesday it had almost covered a E£2.45bn (US$442.2m) rights issue and expects to sell the remaining shares once the regulator gives the go-ahead.
The rights issue is 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 (US$107.3m).
Titan has been struggling to cope with a shrinking business and to cut debt. Alexandria said in a statement released by the stock exchange that the one-month subscription, which closed on June 20, was 99.43 per cent subscribed.
Alexandria has a free float of 11 per cent, according to Reuters data. Its share price dropped four per cent on Tuesday, while Egypt’s main index lost 2.9 per cent.
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, it said in a February 28 letter to the exchange.
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.
Alex will not pay Titan for the Beni Suef shares in cash, but will book it as an outstanding debt to Titan, it said in the Feb. 28 letter.
Titan has agreed sell the 16 per cent stake to the IFC once that transaction is completed.