Qalaa Holdings Board of Directors Approves EGP 1.7 bn Capital Increase

Proposed capital increase will be primarily funded through the capitalization of liabilities resulting from the purchase of additional shares in core subsidiaries as Qalaa finalizes its transformation into a holding company

The Board of Directors of Qalaa Holdings (CCAP.CA on the Egyptian Exchange; formerly Citadel Capital) approved today the submission to the Egyptian Exchange of a Form 48 request for authorization to call an Extraordinary General Meeting of shareholders. The EGM would seek approval to increase the company’s current paid-in-capital by EGP 1.7 bn to EGP 9.7 billion from EGP 8 billion.

The proposed capital increase will be primarily funded through the capitalization of liabilities arising from the purchase of additional shares in core subsidiaries, particularly in energy and cement, from limited partners and co-investors. It comes as Qalaa finalizes its transformation into a holding company with majority stakes in its core infrastructure and industrial investments. In this respect, this capital increase is a smaller, second and final version of the capital increase that Qalaa executed in 2014, which saw paid-in capital rise by EGP 3.64 billion to EGP 8 billion.

“With Egypt now on track for an economic recovery, the time is right to complete our transformation through the acquisition of additional stakes in the subsidiaries and business units that are best positioned to benefit from the upturn,” said Ahmed Heikal, Chairman and Founder of Qalaa Holdings, an African leader in infrastructure and industry.

“Further increasing Qalaa’s ownership in its core subsidiaries at attractive valuations will allow us to maximize earnings over the medium and long term,” said Qalaa Co-Founder and Managing Director Hisham El-Khazindar. “Meanwhile, on the divestiture front, we are pushing forward with the disposal of selected assets. Liquidity generated from exits of these investments at the right time and right valuations will allow us to accelerate our deleveraging and derisking and will further strengthen Qalaa’s financial position.”

The proposed increase will see Qalaa Holdings issue up to an additional 340 million shares, of which 255 million would be common shares and 85 million preferred shares, bringing the total number of outstanding shares to 1.94 billion, of which 1.455 billion would be common and 485 million preferred.

Concluded Heikal: “This will hasten our return to profitability during 2015, one year earlier than originally anticipated, and will open the way for dividend distribution in the coming years.”

Management expects the proposed transaction will be the last such capital increase by synthetic swap of the transformation process.

—Ends—

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.

Forward-Looking Statements
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

CMO & Head of Marketing Communications
Qalaa Holdings
ghammouda@qalaaholdings.com

Tel: +20 2 2791-4439
Fax: +20 22 791-4448
Mobile: +20 106 662-0002