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Act Financial's IPO goes live next month: Investment management firm Act Financial will proceed with its long-awaited IPO on the EGX in July, offering some 32% of the company’s shares following a capital increase, according to the IPO prospectus published on the EGX yesterday. The subscription period for retail investors will take place between 9-23 July and institutional investors will get a chance to subscribe between 9-18 July.
The breakdown: The current shareholders won’t exit any of its existing shares for the IPO, but will instead increase the company’s capital to EGP 281.4 mn, up from EGP 191.4 bn, by issuing 360 mn new shares, on top of the company’s current 765.7 mn shares. The new shares will be divided into 300 mn shares for institutional investors and 60 mn for retail investors. The company aims to raise around EGP 1.04 bn through the offering.
Act thinks it has got an offer that will tempt many investors: The company has set the IPO price at EGP 2.90 a piece, a 36% markdown from the fair value price set at EGP 4.54 per share. The sizable markdown from the fair value was due to an extra 20% reduction that the company decided to throw in to “encourage the market” to pile into the offering, since the IPO market in Egypt hasn’t seen offerings for a while now, Managing Partner Mostafa Abdel Aziz told Al Arabiya Business in an interview (watch, runtime: 6:30).
Where’s the money going? The offering’s entire proceeds will be used to acquire “significant minorities in listed companies,” said Abdel Aziz.
It’s all about the timing: Since the local market hasn’t seen much IPO activity for a while now, traders and investors are laying in wait to jump on promising prospects, Abdel Aziz said. The offering is expected to perform strongly and “we’re looking to set a successful example with this offering,” Abdel Aziz added.
Remember: We first caught wind of Act’s IPO plans back in 2022, when Abdel Aziz told us that the investment firm is aiming to offer up to a 40% stake on the EGX in early 2023.
Advisors: Zilla Capital will manage the IPO, Matouk Bassiouny & Hennawy will act as the company’s legal advisor, Baker Tilly will provide auditing services, and Financial Advice Corporate Transactions will be the independent financial advisor to the transaction.
