Korra Energi private placement 5.7x covered on EGX

Korra Energi’s private placement was 5.7x covered by the close of its subscription window yesterday, with investors placing orders for 845 mn shares against 148.5 mn shares on offer, offering manager Prime Holding’s CEO Yasser Shahin tells EnterpriseAM.

Retail demand is also running hot. The retail tranche was roughly 10.6x oversubscribed by the end of yesterday’s session, with retail investors booking some 1.04 bn shares for the 99 mn shares tranche. Subscription for the retail tranche is set to close today.

Why it matters: Korra’s IPO is the EGX’s second private-sector main-market listing this year after Gourmet’s blockbuster offering. The solid coverage figures signal that local institutions and retail investors are willing to back new listings despite the still uncertain macro and regional backdrop.

REMEMBER- Korra is floating 247.5 mn existing shares — around 11% of its share capital — at EGP 2.97 apiece, putting the offering’s target proceeds at up to EGP 735 mn. The founders scaled back the secondary sale from an initially planned 20%, retaining an 89% controlling stake to capture the company’s anticipated future growth, Korra Energi Vice Chairman Heba Korra tells us. The offer is split 60% to institutional investors and 40% to retail investors. The EGP 2.97 offering price represents a discount compared to the EGP 3.20 fair value set by the independent financial advisor Baker Tilly.

ADVISORS- Prime Holding is the offering manager, El Sherif Law Firm & Consultants is serving as counsel, and Baker Tilly is the independent financial advisor.