Egypt’s United Bank has fixed the offer price of its initial public offering (IPO) for individual investors at EGP 13.85 ($0.28) apiece to raise a total of EGP 4.6 billion ($92.1 million).
The public offering of 16.5 million shares for individual investors will remain open until December 3. According to a statement posted on the local bourse, individual investors must place orders for a minimum of 100 shares.
United Bank is selling a 30% stake of its 1.1 billion shares currently owned by the Central Bank of Egypt.
The first tranche of the offering, available to institutional investors and representing 95% of the issuance, or approximately 313.5 million shares was nearly six times oversubscribed when trading closed on November 25. The remaining 5% is being sold to the public through the Stock Exchange from November 27 to December 3. The price was set between EGP 15.6 ($0.31) and EGP 12.7) $0.26 per share.
Ashraf El-Qady, CEO of United Bank, noted that the six-time oversubscription of the private placement is a reflection of the bank’s strong reputation and the efforts of its team towards innovation and excellence.
The bank’s offering is part of a government program aimed at raising the role of the private sector in the economy.
CI Capital, a securities brokerage and investment firm, is managing the offering, with Commercial International Brokerage (CIB) acting as the broker. In addition, Baker Tilly handles the financial advisor role, while the legal counsel for the offering is being managed by the law firm of Baker McKenzie, “Helmy, Hamza & Partners.” The auditing services are being carried out by Al-Mutadamon Auditing.
IMF review
The sale comes as the International Monetary Fund (IMF) discusses Egypt’s progress in enacting an expanded $8 billion reform program, in a periodic review that may unlock a $1.3 billion loan tranche.
Notably, the latest IMF mission to Egypt which concluded on November 20, has stressed the need to promote the private sector involvement within the Egyptian economy.
In an official statement, Vladkova Hollar, IMF Mission Chief for Egypt and Division Chief in the Middle East and Central Asia Department, emphasized, “Promoting private sector development as the main engine of future growth is crucial to ensuring sustained macroeconomic stability, creating jobs, and unlocking Egypt’s economic potential for the benefit of all Egyptians.”
In line with that, the mission has urged the government to accelerate reforms to level the playing field and reduce the state footprint in the economy. These reforms include the government’s comprehensive plans to streamline the tax system, improve customs procedures, and facilitate trade, the IMF statement noted.
United Bank assets
According to CBE, in June 2024, United Bank’s total assets have grown to EGP 106 billion, up from EGP 72 billion in 2021. The bank’s net profit increased to 1.74 billion pounds in 2023 from 1.14 billion in 2021, highlighting its robust financial performance and strong market position.
United Bank and its non-banking arm operate a wide network comprising 68 branches, 225 ATMs, and advanced digital channels, supported by a workforce of 1,800 employees.
Upcoming stake sales
Earlier in November, Egypt’s cabinet announced that preparations are underway for additional stake sales in the coming months, including plans for “an additional 15 companies.”
