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Management restructuring key to success

CAIRO: When Farida Khamis started working regularly at her family business, Oriental Weavers (OW), she faced two challenges: like any businesswoman in the country, her first was to attain credibility in a male-dominated field. As a woman, her second challenge was even more difficult: restructuring the management of the corporation along the lines of multinational …


CAIRO: When Farida Khamis started working regularly at her family business, Oriental Weavers (OW), she faced two challenges: like any businesswoman in the country, her first was to attain credibility in a male-dominated field. As a woman, her second challenge was even more difficult: restructuring the management of the corporation along the lines of multinational conglomerates.

It is just a more open-minded framework to set up new companies, to start working to market the whole group, says Khamis, OW vice president for corporate finance. It s more of insuring that the company is run in a manner like multinationals are.

Better allocation and usage of human resources, Khamis explains, are at the heart of this more dynamic management style, so, it s never a one man show.

The management restructuring also covered the flow of information from OW to the shareholders when the company was initially offered to the public in 1997.

Because we were set up as a private business initially, or a family business, Khamis explains, not much thought was given to which company would own what stake in subsidiary. Everything was set up on a one-on-one basis, adding that A lot of the analysts and the investors actually had a problem finding consistent information about Oriental Weavers or actually just transparency in general.

There was no [investor’s relations] department, she says.

Thus, interested investors and analysts usually resorted to the factories in 10th of Ramadan industrial city for information and were consequently directed to the financial department.

There wasn’t an understanding that if you give out a certain level of information to these important individuals, it will actually gain or add value to your share price at the end of the day, Khamis explains.

This was a struggle, to actually educate or get the people within the company to understand that it is important to ensure that there is a consistent accurate flow of information to investors and analysts regarding the company or regarding the subsidiaries, she adds.

The restructuring process also aimed at, according to the latest company report, eliminating conflict of interest arising from the ownership of the Khamis family in any affiliated companies; providing all investors with full exposure to all businesses under OW; achieving full vertical integration; increasing purchasing power and realizing different synergies across different entities.

Khamis, who graduated from the American University in Cairo with a degree in business administration, received various specialized training in finance and banking. Besides the summer internships and trainings she took in OW and elsewhere before and after her graduation, she also took the EFG Hermes investment banking credit analysis course.

It was a great experience or a platform to start working with OW in the field that I was interested in, which is mainly corporate financing and investment banking, she says.

Yet there was an added struggle within the structuring process in convincing OW s senior management of the ideas of the young newcomers, Farida and her older sister Yasmine. We both had to prove ourselves, Khamis explains.

Following their father, OW founder and Chairman Mohamed Farid Khamis advice of opting for gradual change, they eventually gained the respect and the trust of senior management.

You don t come in to a company and impose yourself. You have to kind of gain respect or gain people s trust in regards to the position that you are holding.

Of course, it helped that EFG Hermes investment banking advised the company on the restructuring process. And it further helped when results were rewarding. Widening the shareholders brace, the increase of foreign investors and the increase of free float (the Khamis family has recently sold approximately 12 percent of their shares) are but a few examples.

Unfortunately, continues Khamis, the end of our restructuring phase was actually when the [stock] market had started to correct itself and started to decline. So I think the true value of what we did is yet to come.

Topics: FJP

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