Despite the challenging circumstances, Egypt’s Qalaa Holdings, one of the country’s largest investment companies, was “cautiously optimistic” about its affiliate Egyptian Refining Company’s (ERC) recovery prospects, saying that the third quarter (Q3) of 2021 will be the possible beginning of a long road to recovery, a source told Daily news Egypt.
The company’s management anticipated that ERC’s EBITDA will reach about $500-600m by the end of 2022, the source added.
Regarding Taqa Arabia’s potential IPO, the source confirmed that the IPO plans have been shelved at least for the next three quarters, on the back of weak markets and lack of investment appetite. IPO plans may stretch beyond Q2 of 2022.
Qalaa Management revealed that they were not at liberty to discuss the ongoing efforts of debt restructuring for individual companies or at the Holding level but was also adamant that it is highly unlikely to conclude any sort of capital increases on the horizon.
The source said that no plans at the moment to list or divest Dina Farms given the company’s cash flow generating prospects, which do not mirror its heavy asset valuation.
Management remains focused on maximizing asset utilization through introducing new products and expanding on existing ones.
He pointed out that Qalaa remains open to increase its stakes in ERC and Taqa Arabia should agreements with existing shareholders regarding valuations materialize.
“Qalaa focus will continue to be improved operational performance, debt restructuring on holding level and across platform companies, and early consolidation of results to track performance monthly. Qalaa wishes to reach full control of subsidiaries, which could be an incentive for adding stakes within current platform companies or divesting the investment altogether, in case control is not possible. An example for that would be Ostoul or the healthcare subsidiary within Grand View, but those are small companies.” He added.