Qalaa Holding for Investment signed an agreement with Financial Holding International (FHI) to sell FHI some of Qalaa’s units.
This is with the aim of exiting from some non-basic businesses, and reducing consolidated debts according to a statement by the company, Monday.
Under this deal, Qalaa is to sell to FHI its share in each of its stakes in MENA Homes, Grandview and Dina Farms Land Companies, which will be separated from Dina for Agricultural Investments.
In return, Qalaa will buy FHI’s stakes in several affiliated companies, including ASEC Holding in the cement and construction sector, and Taqa Arabia and Mashreq Petroleum in the energy sector. Qalaa will also buy FHI’s stakes in Nile Logistics International in the Transport and logistics sector, Dina Farms Supermarkets in the retail sector, and United Company for Foundries (UCF) in the metallurgical industry sector.
Abdallah El-Ebiary, Managing Director of Qalaa’s cement sector said the cement sector is a main strategic area for Qalaa, and there is no intention of exiting it, or the transport and energy sectors.
In its statement, the company said the investment deal is expected to be finalised by December 2015, after the customary conditions and requirements are met.
The statement continued that according to this deal, Qalaa’s total consolidated debts, estimated at EGP 800m, will be reduced. Qalaa added that reducing debts is “a strategic target for the company during 2015”.
He added that FHI plans to build a new pulveriser mill for ASEC Cement plant in Minya, within the company’s plan to convert to alternative energy due to the energy deficit and gas importing crisis. The cost will be EGP 230m and it will be built in the fourth quarter of this year.
“The company’s strategy for the next period is to diversify new and cheap energy sources instead of the traditional and unavailable sources. The investment cost is at EGP 230m and it is distributed as follows: EGP 10m for a pulveriser mill, and EGP 90m for the mechanisms of producing alternative fuel which would be used in the future,” said El-Ebiary.
The ASEC cement plant, which is affiliated to FHI, had an annual production capacity of 2.2m tonnes of cement in the second quarter of last year, according to El-Ebiary.