Egypt’s Damietta Container and Cargo Handling Company (DCHC) wants to raise its authorized capital to EGP 1.5 bn, up from EGP 400 mn, and increase its issued and paid-up capital to EGP 1.1 bn, up from EGP 200 mn, the bourse said yesterday. While the company has been listed on the exchange since 2022, it hasn’t been actively traded.

The mechanism: The EGP 900 mn capital increase will be distributed across 90 mn new shares with a nominal value of EGP 10 apiece. The hike will be sourced from the company’s statutory reserves and other reserves as reflected in its financial statement as of 30 June 2023, the bourse said.

Remember: DCHC got the green light to temporarily list on the EGX back in 2022. The EGX gave the company a six-month window to meet the requirements to IPO on the exchange and obtain regulatory approvals ahead of its planned IPO, initially scheduled for 2023, but we are yet to see it happen.

What we know: Although it remains unclear who would be able to subscribe to the new shares, local media reported in December that 20-25% of DCHC could be offered up on the EGX during 1Q of this year. The unconfirmed report suggested that the IPO would target major industry leaders from the region like the UAE’s AD Ports and DP World through its private placement.

There are other opinions on the table: Alternatively, the issuance could also be a rights issue where existing shareholders get the new shares in proportion to their current holdings.

Other port operators were also eyed for public offering: Port Said Container and Cargo Handling Company was also included in the Egyptian government’s privatization program list of 32 state-owned companies, and Egypt’s Financial Regulatory Authority was reportedly reviewing the company’s fair value assessment in 2023.

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