Price range of LE19.25 to LE25.00 per share and US$17.72 to US$23.01 per GDR[1]
Palm Hills Developments S.A.E. ("PHD" or the "Company"), a leading real estate developer in the Egyptian market, today announces the indicative price range for the global offering of its ordinary shares ("Shares") which will be admitted to trading on the Cairo and Alexandria Stock Exchange ("CASE") and Shares in the form of Global Depositary Receipts ("GDRs") which will be admitted to trading on the London Stock Exchange plc's regulated market (the "Global Offering"), at LE19.25 to LE25.00 per Share and US$17.72 to US$23.01 per GDR.
The Global Offering
The Global Offering comprises up to 63.4mm Shares to be offered in the form of Shares and GDRs. In addition, up to 9.5mm Shares may be offered pursuant to an over-allotment option (the "Over-allotment Shares"). Each GDR will represent five Shares. The Global Offering will be made to institutional investors outside the United States in reliance on Regulation S and to qualified institutional buyers in the United States in reliance on Rule 144A.
EFG Hermes and Goldman Sachs International have been appointed Joint Global Coordinators and Joint Bookrunners of the Global Offering.
A separate retail offering of 12.9mm Shares will be conducted in Egypt. This announcement does not relate to such Egyptian retail offering. The ordinary shares in the Company offered as part of the retail offering are expected to be offered at a 5% discount to the Global Offering price.
The announced indicative price range of LE19.25 to LE25.00 per Share and US$17.72 to US$23.01 per GDR implies an offering size of between LE1.6 billion and LE2.1 billion or US$302 million and US$392 million (including the Egyptian retail offering and Over-allotment Shares) and a market capitalisation of between LE9.0 billion and LE11.6 billion or US$1.7 billion and US$2.1 billion (following completion of the Global Offering and the Closed Subscription (as defined below)).
All of the Shares in the Global Offering will be sold by existing shareholders of the Company. However, El Mansour and El Maghraby for Investment & Development Company S.A.E. ("MMID"), the holder of 63.3% of the Company's shares prior to the Global Offering, will use a portion of the proceeds from its sale of Shares in the Global Offering to subscribe at the Global Offering price for 49.9mm new Shares to be issued by the Company by way of a capital increase and closed subscription (the "Closed Subscription"). Following the completion of the Global Offering (assuming the over-allotment option is not exercised), the Egyptian retail offering and the Closed Subscription, the Company expects to have a freefloat of approximately 16.4%.
The gross proceeds which the Company is expected to receive in relation to the Closed Subscription are expected to be between LE 961 million and LE1,248 million or US$177 million and US$230 million. The Company intends to use the net proceeds from the Closed Subscription to fund its existing and future development projects and to expand its land bank both in Egypt and abroad.
PHD commenced its institutional roadshow in relation to the Global Offering on 16 April 2008 and expects pricing to occur on or around 29 April 2008.
-Ends-
About the Company
PHD is a leading real estate developer in the Egyptian market, developing primarily high-end residential real estate and resort projects. The origins of the Company date back to 1997 through the operations of its sister company Al Ethadia for Real Estate Investment S.A.E. PHD's controlling shareholder is MMID which owns approximately 63.3% of the Company prior to the Global Offering. MMID is an Egyptian joint stock company established in 1996 by individuals of the El Mansour and El Maghraby families.
The market value of PHD's properties as at 1 March 2008 has been independently valued by CB Richard Ellis (CBRE) at LE 19.5 billion (US$3.5 billion), prior to adjustments for tax, minority interests and land repayment obligations. In the year ended 31 December 2007, the Company generated revenues of LE 535.0 million (US$96.7 million) and net profits LE 179.8 million (US$32.5 million).
The Company has acquired large parcels of land in strategic locations throughout Egypt and has one of the largest land banks held by any developer operating in the Egyptian market consisting of over 38.9 million square metres of land. Of the Company's 21 projects, five are under construction and a further 12 have already been master planned.
Development land locations include: Cairo's West axis in 6th of October City; Cairo's East axis in New Cairo City; the North Coast on the Mediterranean Sea; the City of Alexandria; and various locations on the Red Sea Coast.
Comment
Commenting on today's announcement, Yasseen Mansour, Chairman and Chief Executive Officer of the Company said:
"The Global Offering gives investors the opportunity to invest in one of Egypt's leading real estate developers with a strong track record, a well respected brand and one of the largest land banks held by any developer operating in the Egyptian market."
For further information please contact:
Weber Shandwick Financial (London)
James Chandler/Terry Garrett/Stephanie Badjonat/James White
Tel: +44 (0)207 067 0700
Weber Shandwick Financial (Cairo)
Randa Nassar
Tel +20101022716
[1] Based on an exchange rate of LE5.4325 per US$.
© Press Release 2008
