Bedaya Fund for Small- and Medium-Sized Enterprises (SMEs) aims to acquire stakes in two companies for a total value amounting to EGP 20m in the first quarter (Q1) of 2017, according to a source close to the management.
The two companies are among 15 SMEs and startups.
The source said that the fund’s management has become interested in investing in companies that export products with reliance on domestic raw materials, adding that this would be the best strategy to counter the effects of the depreciating national currency following the flotation of the Egyptian pound.
He pointed out that the fund has invested in four companies, including the Egyptian Malaysian Company for Medical Gloves (EGY Glove), as well as acquiring 20% of NabdaCare, 30% of El Shorouk Scan, and the establishment of an LED factory called Bedaya Lightning.
The convergence of the investments injected by the fund reaches EGP 50m. The fund is currently attempting to invest the entire first instalment of its finding capital of EGP 67m.
In addition, the source said that the fund exited Modern Family Company, having sold 70% of the company’s capital. This mark’s the fund’s first exiting since it was established. The deal was valued at EGP 9m.
Moreover, the source added that negotiations between the fund and officials of El Motahida Co. For Land Reclamation & Industrialization of Agriculture are still ongoing to acquire 13% of the company’s capital. These talks were previously reported to have temporarily come to a halt. The source pointed out that the company fits within the fund’s operational scheme, where it operates in the field of producing fuel from agricultural waste and exporting it abroad.
Bedaya Fund has signed a memorandum of understanding with El Motahida to acquire a stake in the company through boosting its capital by EGP 15m in Q2 2016. However, negotiations on the deal stopped in Q3 due to differences in vision.
The company operates in the field of waste recycling to produce dry fuel. It also recycles rice straw and timber waste from Damietta workshops. The plant recycles them, turning the waste into dry fuel used for heating and running cement and fertiliser factories.
The source noted that the administration of Bedaya Fund will focus in the coming period on reevaluating the company’s investments in its subsidiaries and develop the operational and financial performance, particularly following the decision to float the pound, which has led to rising costs.
He ruled out the fund’s intention to put up any of its company on the Nile Stock Exchange in the coming two years at least.
The General Authority for Investment (GAFI) launched Bedaya Fund in 2013 to acquire stakes in existing SMEs or contribute to establishing new ones.
The list of subscribing institutions in the fund include GAFI, the National Social Insurance Authority (NSIA), the National Investment Bank, SMEs Development Investment Company (subsidiary of GAFI), and Misr Insurance Holding Company.
The fund aims to acquire stakes in companies of capital less than EGP 50m and above EGP 2m.
Al Ahly for Development & Investment (ADI) and Cairo Financial Holding are managers of Bedaya Fund.