Lecico absorbs three subsidiaries to consolidate capacity

Lecico folds three units into itself: EGX-listed sanitaryware and tile maker Lecico Egypt absorbed three of its wholly-owned subsidiaries, closing out a merger process that began last year, according to a bourse disclosure (pdf). The parent’s issued capital was cut to EGP 200 mn from EGP 400 mn by halving the par value of its shares to EGP 2.5, with the share count unchanged at 80 mn.

The subsidiaries in question: International Ceramics, European Ceramics, and Lecico for Ceramic Industries ceased to exist as separate legal entities following the merger, with Lecico Egypt taking on all of their rights, assets, and liabilities. Their three factories — all in New Borg Al Arab, Alexandria — now operate as production branches of Lecico.

The shareholders: The Bank of New York holds the largest stake in Lecico at 31.81% — likely a custodian holding on behalf of foreign investors. Saudi’s Olayan Saudi Investment Company holds 19.89%, UK-based Intage Holding holds 14.62%, and the remaining 33.68% sits with a mix of other holders.

SOUND SMART- Because Lecico already owned 100% of the three arms, there was no purchase price or financing. The merger is an accounting exercise: the net shareholder equity of the absorbed entities, valued at end-2022, was folded into Lecico’s balance sheet.

The rationale: Lecico says the merger allows it to make fuller use of capacity previously split across separate companies, cut overlapping administrative costs, and use its larger scale to compete harder at home, according to the filing.