EGYPT – Orascom Investment Holdings (OIH), a diversified investment firm, is set to acquire 100% ownership of the Nile Sugar Company, an Egypt based beet sugar and extraction plant for US$217.1 million (LE 3.76 billion).
This follows Orascom board of director’s approval of the transaction details as informed by BDO Financial Consultants, an independent financial advisor, which set a fair value of the share capital of Nile Sugar at US$0.16 (LE 2.84) per share amounting to a total of US$217.2 million.
According to a report by Egypt Today, the two firms have already engaged in negotiations with the shareholders on the mechanism of acquisition of the Nile Sugar shares.
Led by Akil Bashir, Orascom’s board Vice-Chairman, the negotiations with Nile Sugar shareholders also sought to determine the purchase price and the terms of payment to the best interest and benefit of the company.
Bashir said that both parties agreed for the trade 1.326 billion shares representing 100% of the issued share capital of Nile Sugar to be acquired by the Orascom.
He further noted that the Independent Financial Adviser (IFA) valuation was recorded at US$217.26 million, pointing that the purchase price hit US$207.38 million (LE 3.59 billion) as the total amount of the shares transaction.
The transaction will also involve settlement of the current shareholders’ loan with an aggregate amount of approximately US$4.04 million (LE 70 million).
Structure and terms of payment
“The remaining 90 percent of the purchase amounting to LE 3.23 billion shall be recorded as debt on the company’s financial statements,” Orascom said in a statement.
Orascom further clarified that it will issue promissory notes with the amount of the remaining 90% of the purchase price as a guarantee for payment in
“The promissory note is payable on demand. However, OTMT (Orascom’s major shareholder) acquisition is committed not to request the cash payment of the remaining purchase price,” the company stated.
However, if the acquisition is not ratified by the regulatory authorities, the parties agreed to reverse the transaction whereby “each party shall take all requisite actions required to implement the transaction reversal.”
Orascom Investment Holding is a diversified investment firm with businesses in GSM, media, cables and mobile communications