Giza Spinning and Weaving Company intends to offer a stake of up to 40% of its capital on the Egyptian Exchange (EGX) in the second half of November. The largest part will be conducted through a partial exit of main shareholders, in addition to boosting capital in order to finance vertical integration operations and expansion of retail activity.
Beltone Financial will work as an initial public offering (IPO) bookrunner, while Matouk Bassiouny will serve as a legal advisor. The financial adviser will be selected within the coming days.
Fadel Marzouk, managing director of the company, told Daily News Egypt that the final share to be floated has not been set, stressing it will not exceed 40% of capital.
For his part, Mohamed Marzouk, the company’s founder and chairperson, said that the flotation of the currency has helped the industrial sector in general and the garment sector in particular. “The recent period witnessed the growth of imports of knitting machines to meet the local demand for ready-made garments after the import costs hiked,” he added.
Marzouk pointed to the company’s focus on the development of the retail sector through the expansion of opening shops to meet domestic demand, pointing to the decline of imports of ready-made garments from 75% of consumption to only 50% after the flotation.
The company’s managing director and chief executive said the group started last year to set up a factory in the Minya governorate with investments of EGP 150m in three phases, the first of which opened in the middle of 2018, in addition to EGP 100m of investments to increase the capacity of spinning by 25%.
Fadel expects work to begin on the second phase of the factory in October, to be launched in the middle of 2019. The third phase will then begin.
The company aims to achieve sales of EGP 1.9bn at the end of this year, against EGP 1.5bn last year, to mark a growth of 27%.
Exports account for about 84% of the company’s sales, while the remaining production is offered in the local market through merchants and Knock Knock chain.
The company was founded in 1979 by Mohamed Marzouk, who is now the chairperson. The company is owned by the Marzouk family. They have been able to classify the company as the top exporter in terms of quantity and sixth in terms of dollar value. The company is also ranked second in terms of dollar value in exporting yarn. The company is the only private company in Egypt to operate a vertical integration system of cotton yarn and even manufacturing ready-made garments.