Tag: Global Investments Holding Co.

  • Egypt Releases Details of Eastern Sale

    Egypt Releases Details of Eastern Sale

    Photo: MamdouhKamals

    Egypt’s Ministry of Public Enterprises has released details of the sale of a 30 percent stake in Eastern Co. to Global Investment Holdings Co (GIHC), reports Ahram Online.

    The Emirati company will pay EGP19.336 billion ($625 million) for 6.689 billion shares of Eastern Co. The payment will be made in U.S. dollars in two transactions. The first payment will be made upon conclusion of the deal in the amount of EGP16.403 billion, and the second payment will be made in the amount of EGP2.932 billion on an agreed upon schedule.

    GIHC has also pledged to provide $150 million to procure tobacco required for Eastern Co.’s manufacturing processes.

    This deal is part of Egypt’s broader initial public offering program aimed at selling stakes in 35 state-owned companies to strategic investors by the end of June 2024.

    In February, the government announced a list of 32 companies for privatization, subsequently adding Eastern Company, Telecom Egypt, and Ezz El-Dekheila. The privatization program is a component of Egypt’s commitment under its $3 billion loan program with the International Monetary Fund. The government hopes to attract $5 billion through privatization between October 2023 and June 2024.

  • GIHC Completes Eastern Co. Share Purchase

    GIHC Completes Eastern Co. Share Purchase

    Photo: artmim

    Global Investment Holding Co. (GIHC) has completed its acquisition of a 30 percent share in Eastern Co., according to reports by Reuters and Ahram Online. The United Arab Emirates company paid EGP16.4 billion ($531.6 million) for its stake in the Egyptian tobacco firm.

    First announced in September, the deal is part of Egypt’s floundering privatization program. In December 2022, the government promised the International Monetary Fund that it would allow private companies a greater role in Egypt’s economy in exchange for a $3 billion, 46-month financial support package.

    In February, the government announced a list of 32 companies for privatization, subsequently adding Eastern Co., Telecom Egypt, and Ezz El-Dekheila to the roster, Ahram Online reported in a separate article. The government hopes to attract $5 billion through privatization between October 2023 and June 2024.

    While it has announced a number of sales to foreign investors in principle, the sale to GIHC is the first to go through. 

    Under the agreement, the Emirati company will provide Eastern Co. with $150 million to procure tobacco materials for manufacturing.

    In addition to CIHC, Eastern Co.’s primary shareholders are the state-owned Holding Company for Chemical Industries (20.9 percent), the Allan Gray Equity Fund (7.2 percent), the shareholders union of the Eastern Co. (6 percent), with the remaining 36 percent of shares trading freely on the stock exchange.

  • Emirati Group Acquires a Third of Eastern Co.

    Emirati Group Acquires a Third of Eastern Co.

    Photo: xtock

    Global Investment Holding Co. of the United Arab Emirates has acquired a 30 percent state in Eastern Co. of Egypt for EGP19.3 billion ($625 million), reports Ahram Online.

    After the sale, the state-owned shareholder, Chemical Industries Holding Co. (CIHC), will retain a 20.9 percent stake in Eastern.

    The deal is part of Egypt’s program to sell stakes in 35 state-owned companies to strategic investors by the end of June 2024.

    Egypt’s minister of public enterprises, Mahmoud Esmat, said the deal underscores the government’s commitment to the success of its program to expand ownership and encourage direct private investment across various sectors.

    In the first nine months of fiscal year 2022-2023 (which concluded in March), Eastern Co. had a domestic market share of more than 70 percent and reported a net profit of EGP5.29 billion, up 24 percent over the comparable period in the previous year.

    The privatization program is part of Egypt’s commitments under a $3 billion loan from the International Monetary Fund.

    The government announced wants to attract $5 billion from the offering of power plants and state-owned companies from October 2023 until the end of June 2024.

    In related news, Eastern recently boosted its production by 40 percent to help alleviate a cigarette shortage in Egypt, according to The Egypt Independent.

    The short supply had caused prices of popular brands such as Cleopatra to surge to unprecedented levels.

    Following Eastern’s decision to increase output and step up vigilance against illicit sales, cigarette prices fell by EGP20, bringing the price of a pack to EGP40.

    Eastern Company CEO Hani Aman announced that the company is working with various state agencies to ensure the proper supplies are being provided to the public.