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Orascom Development Egypt (ORHD), an integrated developer of resort towns in Egypt, announced on Monday that it had sold its stake in Tamweel Group.
The company said in a press release that it has concluded the sale of its 87 percent equity stake in Tamweel Group for a total valuation of close to 360 million Egyptian pounds ($21.47 million) to Ebtikar for Financial Investment, TCV1 and Acquire for Investment S.A.E.
“We view this development positively, as this puts the company’s balance sheet in a more liquid position, in light of the new repayment structure,” Omar El-Menawy, real estate analyst at CI Capital told Zawya by email.
Orascom announced earlier in June that it has signed a 3.8 billion Egyptian pounds debt rescheduling package with Egyptian banks, to strengthen its balance sheet and create more flexibility in advancing its projects. (Read more here).
In Monday’s press release, the company said that it has received 313 million pounds in cash proceeds from the sale of its stake in Tamweel Group.
“The cash proceeds resulted from the sale is geared towards our earlier communicated debt reduction plan, which entails further reducing our outstanding debt balance in 2019 and thus enhancing our balance sheet,” the press release said.
The company’s shares were trading 0.307 percent lower by 15:14 GST on Tuesday at 6.5 Egyptian pounds.
“We are overweight on ORHD and we believe it is oversold as we believe the market is yet to fully price in the company’s primary market entrance through its project, O West,” Mariam Elsaadany, an analyst at HC Brokerage told Zawya by email.
O West is a new project by ORHD, located in Cairo and built over 4.2 million square meters of land.
Elisaadny said that Orascom Development was "currently trading at a 2019 expected Price/Net asset value of 0.30x, lower than the sector average of 0.36x".
"Our target price for the stock is EGP 14.1 per share,” Elsaadany said.
(Reporting by Gerard Aoun; Editing by Michael Fahy)
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