The total amount of South Valley Cement Co. (SVC) capital hike will be unveiled by the end of July 2009, after finalizing the revaluation of company’s internal assets, in addition to the valuation of Golden Pyramids Plaza that SVC plans to acquire, said Cairo Financial
investments
, the financial advisor on SVC restructuring.
The board of Golden Pyramids, the owner of City Stars Mall, had approved in principle the 76% acquisition bid submitted by the cement producer through a share swap, pending extensive studies, shareholder approval and other official endorsements to protect shareholders’ equity.
Early in March 2009, South Valley OGM gave a nod to dividing the company into two entities; the first of which will produce cement, while the other will provide financial consultancy services, to be transformed into a holding company owning all other subsidiaries.
Ashraf Salman, CEO of Cairo Financial
investments, revealed that the valuation processes for all assets of the new parent South Valley Financial Holding will complete by mid-July, with the valuation of Golden Pyramids and its affiliates being finished 15 days later.
The valuation reports will be reviewed by the
investment Committee and then the shareholder meetings of both companies to approve the previously-mentioned acquisition and division, as well as defining the capital lift required for the imminent holding conglomerate to ensure purchasing South Valley Cement and Golden Pyramids in light of their huge cash flows, assets and subsidiaries, he added.
“Afterwards, a request will be presented for exemption from submitting a mandatory purchase bid for the new group. The acquisition targets 100% of Golden Pyramids shares, but the actual percentage will be determined as per the shareholders’ response to the proposed valuation,” Salman indicated.
The restructuring movement involves also changing South Valley’s trademark to reflect company’s new
investments, he pointed out, expecting maximum cement production capacity to reach 1.9 million tons by year-end, which offers great potential for development or making strong profit through divestiture.
Finally, Salman noted that the planned capital hike will be implemented in two phases. First, capital will be increased after the division and the new company will be reacquired through a stock swap. The other increase will be effected after acquiring Golden Pyramids, by means of a share swap between the latter and the holding company.