The Algerian government is negotiating with Egypt's ASEC Cement to acquire a minority stake in its Algeria-based operations, the firm's main stakeholder told the stock exchange on Wednesday.
Algeria aims to acquire 49 per cent of ASEC Cement Algeria by increasing the company's paid up capital, which currently sits at $60 million. Cairo-based private equity firm, Citadel Capital, has a 48.5 per cent share in ASEC Holding, which in turn owns 61 per cent in ASEC Cement, according to Citadel's website. Citadel directly owns 33.44 per cent of ASEC Cement. If the deal is completed, ASEC Cement would own 51 per cent of ASEC Algeria. It currently holds a 72 per cent share. The negotiations between the government and ASEC Algeria come as the latter announced plans to establish of a new cement plant, producing 3.5 million annual tonnes, near the northern Algerian city of Djelfa. Its plans were stalled, however, after Algerian banks were reluctant to provide funding, according to a note from Egyptian investment firm, Beltone Financial. "The [Algerian] government wanted to bargain a stake [in the new plant]," Beltone said. In 2008, ASEC Cement entered the Algerian cement market via a partnership with the Algerian government, with the company buying a 35 per cent stake and management control at Zahana cement plant in the west of the country