DBK Pharma plans to offer about 30% of its shares on the Egyptian Exchange (EGX) at the end of the first quarter (Q1) of 2017.
Sources at DBK Pharma said that the company is awaiting the completion of the fair value report of its shares, which will be submitted to the Egyptian Financial Supervisory Authority (EFSA) this week or next week, as one of the basic steps to offer the company’s shares on the EGX.
The sources added that the board of directors will meet early next month to set the timetable for the IPO, as the company has contracted with Pioneers Holding Company to take over the offering of its shares on the EGX.
They further added that DBK Pharma depends largely on Pioneers to promote the company’s shares among investors, interested financial institutions, and brokerages which have a good base of individual investors and financial institutions.
The promotion of DBK Pharma’s shares is the first process to be implemented by Pioneers among investors.
DBK Pharma had recently changed the formation of its board of directors by adding four experienced independent members: Ahmed El-Ezaby, head of the Chamber of Pharmaceuticals, Cosmetics, and Appliances of the Federation of Egyptian Industries (FEI) and chairperson of Multipharma Inc.; investment and finance expert Hashim El-Sayed; former minister of industry Ibrahim Fawzy; and Awad Gabr, former head of the Egyptian Export Council of Medical Industries (ECMI).
The sources pointed out that the promotion of shares requires hard work and effective action as DBK Pharma had tried to offer about 35% of its shares on the stock market in December 2015, but failed to cover the offering.
The failed offering prompted the company to demand that its shares be delisted from the stock market. The company applied for another offering several months ago, and the EGX’s Listing Committee approved in August the listing of the company with a capital of EGP 149m, at a nominal price of EGP 1 per share. The shares are owned by businessman Hamdy Aldbeky.
Some press reports said that Fincorp Investment Holding will be the independent financial adviser for the IPO (responsible for determining the fair value of shares), while KPMG-Hazem Hassan Consulting will take over the financial and administrative restructuring of the company. Ibrachy and Partners will be the legal adviser for the company’s IPO.
During the first half of this year, DBK Pharma achieved a net profit of EGP 20.8m, compared to EGP 20.3m in 2015—a growth of 2.5%.
DBK Pharma will use the proceeds of selling its shares in the development of its factory, financing the working capital, adding new production lines of pharmaceutical and medical products, and increasing exports benefiting from the devaluation of the pound.