By Radarr Africa Business Desk
October 26 (Radarr Africa) – Egypt’s state-owned Banque Misr has increased the size of its planned sale of Banque du Caire (BdC) to 45 per cent of the bank from 30 per cent, with the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC) agreeing to take part, EnterpriseAM reported.
The Financial Regulatory Authority approved the increase on Thursday, October 23, according to a BdC statement cited by EnterpriseAM. Banque Misr will now sell 6.86 billion shares, up from 4.575 billion in the original offer. The extra 2.29 billion shares are split 95 to 5 between institutions and retail investors, as in the original structure.
The private placement rises by 2.17 billion shares to 6.52 billion, or 42.75 per cent of the bank. The public offering rises by 114.4 million shares to 343.1 million, or 2.25 per cent. Banque Misr keeps 55 per cent of the bank.
EnterpriseAM reported an offer price of EGP5.30 per share, the top of the EGP4.82 to EGP5.30 range. At that price the total sale is about EGP36.4 billion, or about $680 million, against EGP22.05 billion to EGP24.25 billion for the original 30 per cent. The price implies a valuation of about EGP80.8 billion, or about $1.5 billion, for the bank. The offering is fully secondary, so all proceeds go to Banque Misr and not to the bank itself.
The offering circular names four cornerstone investors: Helikon, Redwheel, Sustainable Capital and Waha Investments. The EBRD and the IFC are not among them, but each has agreed to take up to 15.74 per cent of the enlarged private placement, or up to 1.03 billion shares each, worth up to EGP5.4 billion, according to EnterpriseAM. The final allocations depend on the bookbuilding, the outlet said.
Demand has been strong. EnterpriseAM reported that the private placement sold out within hours of opening and was about six times covered when it closed on Friday, October 24. It said sources cited by Asharq Bloomberg put coverage at 19 times, excluding institutions that had committed in advance. Retail orders reached 454 million shares by Thursday’s close, nearly double the 228.75 million originally offered.
The final price announcement was scheduled for Monday, October 26, and the retail book closes on Wednesday, October 28. EnterpriseAM said institutional shares are due for delivery around November 2, which is also the expected first day of trading under the ticker BQDC. CI Capital will run a 30-day stabilisation mechanism after trading starts, allowing retail buyers to sell back at the offer price if the stock falls below it.
CI Capital and EFG Hermes are the joint global coordinators and bookrunners, according to EnterpriseAM.
The outlet said BdC is coming to market below what two brokerages, Arab African International Securities and Ostoul, think it is worth, even at the top of the range. It added that the government wants to finish its International Monetary Fund programme before it expires on December 15. The IMF arrangement is an $8 billion facility, Rio Times reported.
The sale has a long history. Daba Finance, in a report distributed by AllAfrica, said the bank’s shares were provisionally registered on the Egyptian Exchange (EGX) in 2017, and that a sale of about $500 million planned for 2020 was halted by Covid-19. The offer was later targeted for 2022 and then 2026.
The Middle East Observer reported that Egyptian stocks fell sharply on October 18, with the EGX30 down 2.63 per cent to 50,896.19, its lowest close since July 1. Foreign investors were net sellers of EGP5.562 billion that day, the outlet said.
