Egyptian Resorts signs MoU with Orascom Hotels to Acquire EGP0.9-1bln Assets

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Egyptian Resorts Company (ERC) signed an MoU with Orascom Hotels & Development (OHD) as an initial step to inorganically develop new revenue streams through acquisition of select assets from OHD and other sister companies preliminarily estimated to be worth EGP 0.9-1billion.

These acquisitions will be financed through a capital increase at EGP1.90–2.10/share , according to company’s press release.
ERC plans to acquire OHD’s majority stakes in 3-4 hotels and a significant undeveloped land bank strategically located adjacent to Sahl Hasheesh.

OHD and its sister companies may become anchor shareholders in ERC via subscription to an at-market capital increase.
ERC intends to call for a capital increase of up to EGP 1 billion while capitalizing the uncovered portion of the liabilities arising from the acquisitions by issuing shares to OHD.

The capital increase may result in OHD and its sister companies becoming ERC’s lead shareholders as OHD and its sister companies hold an indirect 4.5% stake in ERC.

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