Beltone wraps up huge capital increase: Investors fully subscribed to Beltone blockbuster EGP 10 bn capital increase, the company said in an EGX disclosure (pdf) yesterday. The rights issue was 98% covered by investors during the first phase of subscription, which ended last week. The remaining shares were sold during a second subscription phase that closed yesterday — and that was nearly 5.5x oversubscribed. In total, the transaction placed 5 bn new shares in the market.

Beltone now has global institutional investors on its shareholder list, group CEO Dalia Khorshid said in a statement (pdf) out last night. “We are pleased [with] … the support we have received from existing shareholders as well as new investors who have participated, amongst them prominent global institutional investors,” she said, calling it a “testament to our transformation plan aiming at value-driven growth.”

Beltone has done a 180° shift since Khorshid’s appointment by the UAE’s Chimera last year, recruiting an all-new team of senior execs (including CEOs for key lines of business), restructuring, and “investing in our digital future,” she said. “As a team, we look forward to building on that foundation as we grow at home and across global markets, calling on data-driven fundamentals to create growth for our shareholders,” Khorshid added.

A reinvigorated Beltone is good for the market, as we’ve written previously, harkening back to a day when the three-way race between EFG Hermes, CI Capital and Beltone delivered strong competition at home and beyond.

Beltone’s capital increase ≠ Orange or CIB: The nature of the transaction is fundamentally different. The largest single capital increase in Egypt was in March 2020, when France’s Orange used a capital increase to inject EGP 15 bn into Orange Egypt. CIB last year executed a capital increase of a bit less than EGP 10 bn by issuing new shares to existing stockholders, paid out of the company’s reserves.

The key here is that Beltone went to market to raise fresh capital — and welcomed plenty of new shareholders in the process, including both high-profile global and regional institutions. Egyptian retail investors also clamored to be allocated shares, as the oversubscription ratio on the second round of the increase shows.

Chimera is Beltone’s majority shareholder: Abu Dhabi-based investment company Chimera Investments last year acquired 56% of the company from Orascom Financial Holding in a transaction that valued the company at EGP 690 mn. Chimera, a unit of Royal Group, is helmed by our friend Seif Fikry, a veteran of regional financial markets.

Market reax: Beltone’s shares closed down 2.4% at EGP 4.07 per share yesterday. The benchmark EGX30 was up 0.6% yesterday in weak trading ahead of the holiday long weekend.

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