Reuters – Pioneers Holding plans to use a capital increase to help finance the acquisition of a 60% stake in real estate investment firm Rooya Group, a senior executives said.
“The deal will be financed in cash and through a capital increase in Pioneers Holding shares subject to valuation,” said Mohamed Aboulghait, managing director, financial services, told Reuters in an interview.
He did not specify the size of the capital increase or when it would be concluded.
He expected the acquisition to have a positive effect on profits but declined to make any estimates.
Pioneers chief executive Waleed Zaki had told Reuters in February that the deal is expected to cost around EGP 1bn ($142.95m).
He said the group was considering floating and listing Rooya Group, which had EGP 900m in revenue in 2013, on the stock market after the acquisition.
Pioneers specialises in brokerage services, offers market research and investment banking for retail and institutional clients but also has investment arms in real estate, industry and financial services.
Aboulghait said Pioneers has another “medium-size deal” under due diligence and a “mega deal” under scope of attention. He declined to name the companies or provide further details about the size or timing of the potential deals.
Zaki said in February that Pioneers was looking to acquire a significant stake in a food company without giving details.
Egypt’s economy has taken a big hit after a popular uprising toppled Hosni Mubarak in 2011, driving many foreign investors and tourists away.
But investors are hoping for more stability with the implementation of an army-led plan that includes new presidential elections next month.
Abdel Fattah Al-Sisi, the former army chief who ousted head of state Mohamed Morsi last July following mass protests against his rule, is widely expected to win.