ASEC buys out Helwan Cement, 1H net profit declines 8.7 percent
The Cairo-based Arab Swiss Engineering Company (ASEC) has bought out all the shares in Helwan Portland Cement Co. (HPCC) that it did not already own, at a price of 51.1 Egyptian pounds ($11.98) per share, according to Prime Securities. This constitutes a 37 percent premium to the current market price, and draws to an end the somewhat protracted privatization process of HPCC. ASEC announced that following the acquisition, its cement dividion will merge with HPCC.
Helwan Cement announced this week its un-audited results for the first half of the current financial year, in which net profit declined 8.7 percent to LE96.40 million, compared to LE105.57 million in 1H FY0, according to Prime Securities.
While ASEC, which until now held 3.5 percent of HPCC, or 878,745 shares, was willing to buy all the remaining shares of the company, it tendered to acquire a minimum stake of 75 percent. Going by the tender offer, which was valid until September 9, HPCC is sale price is valued at EP1.28 billion.
As part of Egypt’s privatization program for the year 2001, the Holding Company for Metallurgical Industries, which holds 47.9 percent of HPCC, has announced in February its willingness to sell its stake in the company to a strategic investor or a group of strategic investors.
In mid-August the Ministry of Public Enterprise had indicated that all the remaining shares in privatized public enterprise companies are available for sale and that there were a number of serious offers, which were being negotiated, concerning remaining interests in Helwan cement.
Rumors of the imminent sale sent up HPCC shares over the past couple of weeks. For the 52 weeks ending August 30, the stock of this company was up 15.7 percent to EP37.39. During the past 13 weeks, the stock has increased 9.4 percent.
Established in 1929 under the public enterprise sector law, HPCC has been operating as a joint stock company since 1996. HPCC sales in the year 2000 reached EP 582.62 million ($136.7 million), dropping 5.2 percent as compared to the company’s sales in 1999. The company’s four plants in Helwan and Minya produce various types of cement, building materials and manufactures bags for storing cement and building materials.
Egypt’s 69-million strong population currently consumes some 29 million tons of cement annually, 86 percent of which are produced locally, with demand estimated to be rising at 10-12 percent per annum. There are nine cement companies currently operating in the industry, four of which have been already privatized. — (Mena Report)
© 2001 Mena Report (www.menareport.com)