Sarwa Capital gets regulatory approval for Cairo IPO

Egypt’s Sarwa Capital obtained regulatory approval on Tuesday to place 47.2 percent of its shares in an initial public offering expected to be completed this month.

Sarwa, whose majority shareholder is the Egyptian-American Enterprise Fund, received the IPO green light from the Egyptian Financial Supervisory Authority (EFSA), according to a company’s statement.

According to the statement, the shares will be offered in two tranches consisting of: (i) a retail offering of 29.52 million shares to individual investors, representing 10 percent of the offering (the Retail Offering). The second tranche is a (ii) a private offering of 265.65 million shares to qualified institutional investors, representing 90 percent of the offering (the Institutional offering).

“Following the offering, the selling shareholders will use a portion of the offering proceeds to subscribe to 700 million Egyptian pounds in a closed subscription at the offer price (the “Capital Increase”),” the statement added.

The company has set a maximum price of around 8.5 Egyptian pounds ($0.5) per share ahead of its initial public and private offering beginning next week, financial sources told Reuters on Friday.

That would place a maximum value of 2.51 billion Egyptian pounds ($140.38 million) on the 40 percent of the financial services provider’s shares on offer between October 3 -10.

The final price for the offering is expected to be announced on October 4 after the private placement.

Egypt’s Beltone Financial will manage the sale of around 295 million shares, of which around 266 million will be sold privately and around 29 million will be sold in the public offer.

Sarwa manages a number of companies offering a full range of products and services including auto credit, insurance and consumer finance (all targeting the retail market) as well as structured debt advisory, arrangement, and underwriting for corporate clients.