Egypt’s Alexandria Cement received the go-ahead for a E£2.45bn rights issue scheduled to begin May 19, the stock exchange said on Wednesday.
The transaction will pave the way for Alexandria Cement’s main shareholder, Greek cement maker Titan, to sell a 16 per cent stake in Alexandria to the International Finance Corporation (IFC) for EUR80m.
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.
It 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 February 28 letter.
Titan has agreed to sell the 16 per cent stake to the IFC once the transaction is completed. Titan expects to complete the IFC sale before the end of June, it said last month.