Hazem Moussa, the chief executive officer of the company, told Daily News Egypt that the company aims to enter the Egyptian financial market, as the first company specialised in its market sector to benefit from the current movement in the Egyptian financial market and to attract funds to help the company strengthen its capital base of affiliated companies.
Sarwa Capital owns a large number of companies, with Contract Consumer Funding at the top, including funding cars, and instalment services on consumer goods and durable goods, representing over 85% of the volume of the group’s business. It also owns a company for real estate funding and another for financial leasing of small and medium companies, known as ‘Plus Leasing.’
Moussa explained that the offering plan aims to attract about $120m through increasing capital and a partial exit of the main shareholder to increase the shares launched and improve share liquidity, noting that one third of the offering worth EGP 2.1bn will be directed to increasing capital.
In the current time, the company is working to establish two insurance companies, one for life insurance and the other for property insurance. They will focus mainly on individuals’ insurance operations with investments worth EGP 200m, while the rest of the proceeds from the operation will be used to fund the rest of the company’s activities, he added.
Meanwhile, he explained that the past five years represented a rapid growth in the company’s business, noting that the annual net profit over the past five years reached 52%, revealing that the net profit reached EGP 148m during the first half of this year. Promotion operations were launched in the Arabian Gulf today, and the few upcoming weeks will see many promotions for the offering in Europe, North America, and South Africa, noting the initial promotion of the offering was welcomed by investors in global markets, expecting the company’s trade in the stock exchange to begin in early October, noting that the company has submitted all the required papers to the regulatory bodies that required them, and is currently awaiting approval for the prospectus, he elaborated.
On the activities of the company, he explained that it is working on two main lines, one of them is for individuals. Contract mainly runs this activity, and in addition, there are other activities by the companies to meet the financial needs related to debts through financial leasing, securitisation, and bonds’ issuance. The CEO of the company said that its strategy mainly relies on focusing on building financial activities correctly through a wide base of customers, especially, small and medium sized enterprises (SMEs). The average size of financial leasing contracts is EGP 1.5m, and they mainly focus on the medical sector and machines.
He explained that building a wide base of customers for the company has led to a defaulting rate of less than 0.3% in 16 years as a result of the system stemming from the market itself, whereby he revealed that the company is seeking to add new funding tools, whether short-term bonds, covered bonds, or instruments.