By Mohamed Ahmed
The Arabian Food Industries Company (Domty) decided to segment the par value of stock from EGP 1 to EGP 0.10 in preparation for an initial public offering (IPO) of the company’s shares on the Egyptian Stock Exchange (EGX), according to sources, who requested anonymity.
According to the sources, Domty will begin registering the shares after the segmentation via the central depository system at Misr for Clearing, Depository and Registry, immediately after Eid al-Adha. This comes as a prelude to complete the registration and subtraction steps planned early next year.
According to previous statements from Mohammed Damati, managing director at Domty Foods and Dairies, the IPO will involve a capital increase and a partial sale of chief existing shareholders’ shares. The outcome of the IPO will be used to increase the production capacity by between 20% and 30% and establishing a new factory, as well as producing new products.
EFG Hermes and Akanar Financial Advisors will provide their expertise and advice on the process.
Ahmed El-Guindy, Head of EFG Hermes, said that the goal of any segmentation process is to increase the number of subtracted shares to create trading liquidity.
El-Guindy added that the subtracted share and the value of the IPO targeted by Domty have not been confirmed yet.
Domty was founded in 1989 and is specialised in the cheese industry, dairy products, as well as juices, which were added in 2013.
Domty’s paid up capital is worth EGP 50m. Damati family owns 70% of the company’s shares, while a Saudi investor owns 30%. The company currently owns two factories in the Cairo suburb of 6th of October City and produces 100,000 tonnes of cheese and 40,000 tonnes of juices every year.
Domty aims to increase sales this year to EGP 1.5bn, compared to EGP 1.13bn in 2014. The domestic market accounts for 90% of the company’s production, while the remainder 10% goes to Middle East markets.