It is difficult to take the decision to offer under the difficult circumstances in the local and international stock markets, says Beltone Capital CEO

    Giza Systems’ Initial Public Offering (IPO) in the Egyptian Exchange (EGX) was delayed because of the turmoil in the local, regional and international markets, CEO of Beltone Capital Hazem Barakat said.


    Barakat explained that Beltone owns 60% of Giza Systems. The shareholders include a number of institutions, most prominently Banque Misr, the National Bank of Egypt, and the Saudi Arabian company Al-Rashed.


    There is no relation at all between the decision to delay Giza Systems’ IPO and the procedures of Beltone Capital’s IPO, which is expected to be completed in the second half of 2016.


    Barakat recently told Daily News Egypt that the Egyptian Financial Supervisory Authority (EFSA) is now checking the fair value report of the company’s share that was submitted by the independent financial consultant Grant Thornton Mohamed Hilal. Grant Thornton suggested that the share fair value is approximately EGP 27.28.


    He said Giza Systems’ IPO aims to provide funding for the company’s expansions in the local and foreign markets. The company’s business size amounts to about EGP 1bn annually, achieving 50% through the foreign markets under its ownership of a braches network in the Gulf area and Africa.


    The company is specialised in designing the technological solutions for a number of sectors such as communications, oil, hotels, transformational industries, and real estates.


    Barakat previously said the investment bank Beltone Financial was entrusted to be the financial consultant to carry out the mission of listing the company in EGX, as well as the evaluation and promotion of the IPO among the investors.


    EGX witnessed a delay in a large number of companies’ listing because of the unsuitable investment climate. EGX agreed to the demands of a number of companies last December to delay offering their shares. These companies include AT Lease with a capital of EGP 200m, InterCairo Aluminium Industry with a capital of EGP 200m, and Misr Fertilisers Production Company (MOPCO) with a capital of EGP 2.2bn.


    The companies’ list also included International Printing and Packing Co. with a capital of EGP 79.5m, Sky Light for Touristic Development with a capital of EGP 102.8m, Beltone Capital with a capital of EGP 584.5m, and Misr Financial Investments Co. This is in addition to a single company in the Nile Stock Exchange, New Castle for Investment Sports, with a capital of EGP 4.4m.


    EGX witnessed the failure of two IPOs in a row for the first time in years, in the last months of 2015: DBK Pharmaceutical which saw an IPO subscription rate of 1.17%, which led to delaying the IPO. The other company is IT Synergy, for which investors subscribed to only 30% of its offered shares, which pushed the company to look for a strategic investor to buy a share of its stocks in order to fund its expansions.



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