17 February 2015       Download

Aggressive move contemplates a potential exit of remaining key food businesses to accelerate group deleveraging and de-risking; would permit the refocusing of bandwidth and resources on energy, cement and other core businesses.

Qalaa Holdings (CCAP.CA on the Egyptian Exchange, formerly Citadel Capital), an African leader in infrastructure and industry, announced today that it has mandated EFG Hermes Investment Banking to advise on the possibility of full divestiture of Qalaa’s remaining key food businesses: leading confectioner Rashidi El-Mizan, a storied brand that is Egypt’s market leader in halawa and tahini products; and Dina Farms, the largest private-sector dairy farm in Egypt and Africa and the top fresh packaged milk producer in the country.
The news comes following a disclosure issued to the Egyptian Exchange yesterday noting that Qalaa expects to generate c. US$ 300 million in proceeds from exits in the medium term.
The packaged foods industry in Egypt has recently seen an uptick in M&A activity. “In this context, we have been approached by more than one party interested in potential transactions regarding our key investments in the agrifoods sector; we have a clear duty to shareholders to fully explore our options in this respect,” said Qalaa Holdings Chairman and Founder Ahmed Heikal.
Explained Qalaa Co-Founder and Managing Director Hisham El-Khazindar: “Any divestiture would achieve the twin aim of significantly accelerating the deleveraging of Qalaa, while simultaneously funding growth opportunities in core subsidiaries generally, and in nationally significant energy projects specifically, including fuels bunkering and storage project Mashreq in the Suez Canal and large-scale power generation projects by TAQA Arabia.”
Concluded Heikal: “This will hasten our return to profitability, which we would now anticipate in 2015 as opposed to next year as we had originally envisioned.”