{"id":561217,"date":"2021-03-30T04:21:11","date_gmt":"2021-03-30T04:21:11","guid":{"rendered":"https:\/\/enterpriseam.com\/egypt\/2021\/03\/30\/idh-eyes-april-listing-on-the-egx\/"},"modified":"2021-03-30T04:21:11","modified_gmt":"2021-03-30T04:21:11","slug":"idh-eyes-april-listing-on-the-egx","status":"publish","type":"post","link":"https:\/\/enterpriseam.com\/egypt\/2021\/03\/30\/idh-eyes-april-listing-on-the-egx\/","title":{"rendered":"IDH eyes April listing on the EGX"},"content":{"rendered":"

<\/a> Consumer healthcare giant Integrated Diagnostics Holdings (IDH) aims to go ahead with <\/strong>its listing on the EGX in April<\/strong>, a source with direct knowledge of the matter told Enterprise, noting that the timeline is subject to customary regulatory approvals. The London-listed company received approval<\/a> last week from the Financial Regulatory Authority to proceed with the transaction, which will see the company list 5% of its shares on the EGX in the bourse\u2019s first \u201ctechnical listing.\u201d<\/p>\n

Hold up. What\u2019s a technical listing?<\/strong> That\u2019s when a company lists its shares on an exchange, but doesn\u2019t offer new or existing equity for sale. Instead, what IDH has done is convince enough shareholders in London to come over to the EGX and transfer their shares here. Others could follow suit in the future at their convenience \u2014 the shares on both exchanges are what the finance nerds call \u201cfungible.\u201d<\/p>\n

IDH will kick off this afternoon its roadshow in support of the listing<\/strong>, CEO Dr. Hend El Sherbini tells us. The roadshow will see El Sherbini and top IDH execs meet potential institutional investors from across the region and beyond.<\/p>\n

The roadshow will include meetings in Egypt with local institutions<\/strong>, El Sherbini says, a fact that underscores one of the challenges IDH is looking to address with the EGX listing: \u201cWe don\u2019t have Egyptian institutions in our shareholder registry,\u201d she explains. \u201cOur shareholders are very much concentrated right now in Europe and the United Kingdom. We would really like to see Egyptian as well as GCC- and MENA-based funds in the shareholder base, and we\u2019d love some US representation as well.\u201d<\/p>\n

IDH listed in London back in 2015<\/strong> in a very well-received offering that was more than 11x<\/a><\/a>oversubscribed<\/a>, but the firm is very tightly held: The investors who have bought in like the story and haven\u2019t been big sellers. That\u2019s made it hard for new investors to buy in, and it\u2019s one reason IDH is moving ahead the transaction.<\/p>\n

At least 5% of current shareholders will transfer their shares from the LSE to the<\/strong> Egyptian Exchange <\/strong>to satisfy regulatory requirements here, El Sherbini says.<\/p>\n

\u201cWe want to give institutions and individuals who want to invest in healthcare the chance<\/strong> to be part of IDH<\/strong>,\u201d El Sherbini explains. \u201cThe goal is to widen our base of investors at the same time as we give a boost to both the liquidity of the share and, ultimately, the share price. Egypt is our largest market<\/strong>. Our brands \u2014 Al Borg and Al Mokhtabar \u2014 are trusted, and the Al Mokhtabar brand has been in this market for more than 40 years. It just makes sense.\u201d<\/p>\n

How will the local listing crack the liquidity problem? <\/strong>\u201cThe benefits to shareholders, including myself, is that we\u2019re giving much more visibility to the shares. Whether you\u2019re a foreign, regional or local investor \u2014 institutional or high net worth \u2014 investors in the EGX know the market. So we\u2019re automatically limiting the pool of potential investors to people who are looking for shares like ours. And when we list in Egypt, we\u2019ll be an important company just by virtue of our revenues, our profitability and our market cap. We\u2019re going to stand out when it comes to people who want to buy shares like ours. <\/strong>We\u2019re simply less visible in London.\u201d<\/p>\n

So if shareholders with at least 5% have already agreed to transfer their holdings to the<\/strong> EGX, why the roadshow? It\u2019s all about education<\/strong>, El Sherbini says: \u201cWe need fund and portfolio managers to understand us, to ensure there\u2019s knowledge of our story among both potential buyers and sellers going forward.\u201d<\/p>\n

What\u2019s El Sherbini\u2019s pitch to investors? <\/strong>\u201cWe\u2019re the biggest consumer healthcare player in our part of the world, offering medical diagnostics and radiology services through a portfolio of leading brands in Egypt, Jordan, Sudan and Nigeria. For the past decade, we\u2019ve been and remain the only lab in Egypt accredited by the College of American Pathologists. Our market is growing fast: As we said in our recent trading update<\/a>, we grew the top line by c. 19% last year to about EGP 2.6 bn and our EBITDA margin has consistently been around 40% for years and years. We\u2019re profitable and cash generative, so we have traditionally paid dividends on a yearly basis,\u201d El Sheribini said.<\/p>\n

The company is also well-governed<\/strong>, she said, with a world-class board led by chairman Lord St John of Bletso and including industry veterans from Europe and beyond. \u201cThe quality of the board \u2014 which is majority independent non-execs \u2014 and the fact that we have and will continue to abide by the very strict governance rules of the London Stock Exchange should give investors a lot of comfort.\u201d<\/p>\n

IDH IN NUMBERS:<\/strong><\/p>\n