The sale of two metallurgy companies is expected to close in January 2015 as part of Qalaa Holdings’ drive to liquidate a small group of companies classified as ‘discontinued’ in Qalaa’s financial statements by the end of 1Q15
United Foundries Company SAE, a non-core asset of Qalaa Holdings, signed today sale and purchase agreements for 100% of two metallurgy companies for a total deferred consideration of c. EGP 260 million at the current rate of exchange.
Under the terms of the transactions, a group of investors led by Mr. Ahmed Sid Ahmed — one of the original founders and shareholders of the two companies — will acquire 100% of the shares of Alexandria Automotive Casting SAE (AAC) for a deferred consideration of EUR 27 million and 100% of the shares of Amreya Metal Company SAE (AMC) for a deferred consideration of EGP 20 million. Both companies produce cast parts and components for the local and global automotive assembly industry.
The sale amounts are payable over a six-year period ending June 2021, and the buyers may receive discounts in the event that payments are made on an accelerated schedule.
Both companies are classified as “discontinued operations” in Qalaa’s financial statements alongside a group of companies including turnkey contractor ESACO; and agrifoods brands Enjoy, Misriyeen, El-Aguizy and Mom’s Foods. Together, discontinued operations contributed losses of EGP 143.9 million to Qalaa Holdings’ income statement in the nine months ending 30 September 2014. Fully EGP 64 million of those losses were contributed by AAC and AMC.
“We have made a clear commitment to our shareholders and our board to finalize the disposal of our discontinued companies by the end of 1Q15 to avoid the consolidation of needless losses on our P&L,” said Hisham El-Khazindar, Co-Founder and Managing Director of Qalaa Holdings (CCAP.CA on the Egyptian Exchange, formerly Citadel Capital), an African leader in infrastructure and industry.
“This transaction is fundamentally about the reduction of risk as we look to focus on our proven winners going forward and thus refrain from sinking funds into turnarounds that may or may not succeed,” added El-Khazindar.
Execution of the transactions will result in neither a capital gain nor a loss to Qalaa Holdings at the consolidated level at this time.
The transactions are expected to close in January 2015 and are subject to conditions precedent; both SPAs include further provisions to protect the interests of UCF until such a time as the sale amount is paid in full.
United Foundries and its plant, which specialize in the production of consumables for the cement industry, are not subject to sale under these agreements and remain non-core assets of Qalaa Holdings.
Previous Qalaa Holdings press releases on this subject and others may be viewed online from your computer, tablet or mobile device at qalaaholdings.com/newsroom
Qalaa Holdings(CCAP.CA on the Egyptian Stock Exchange) is an African leader in infrastructure and industry. Formerly known as Citadel Capital, Qalaa Holdings controls subsidiaries in core industries including Energy, Cement, Agrifoods, Transportation & Logistics, and Mining. To learn more, please visit qalaaholdings.com.
Statements contained in this News Release that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Qalaa Holdings. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Certain information contained herein constitutes “targets” or “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “seek,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Actual events or results or the actual performance of Citadel Capital may differ materially from those reflected or contemplated in such targets or forward-looking statements. The performance of Qalaa Holdings is subject to risks and uncertainties.
For more information, please contact:
Ms. Ghada Hammouda
Head of Corporate Communications
Citadel Capital (S.A.E.)
Tel: +20 2 2791-4439
Fax: +20 22 791-4448
Mobile: +20 106 662-0002