Etisalat Unit Said to Plan Biggest Cairo IPO Since 2009

Aug 03, 2014 6:45 am ET

(Updates with analyst comment in fourth paragraph.)

Aug. 3 (Bloomberg) -- Etisalat Misr, the Egyptian phone company controlled by Emirates Telecommunications Corp., is in talks with banks about what may be the country’s largest initial public offering in almost five years, according to three people with knowledge of the matter.

Etisalat Misr, 66 percent owned by the Abu Dhabi company known as Etisalat, has asked banks for proposals to manage the share sale, the people said. The IPO is planned for Cairo and may raise about $500 million, they said, asking not to be identified as the information isn’t public. A spokesman for Etisalat Misr declined to comment when contacted by phone today.

Egyptian companies are reviving share sales as they seek to benefit from a 30 percent gain in the country’s benchmark EGX30 Index this year. Edita Food Industries, a snacksmaker part-owned by London-based buyout firm Actis LLP, is considering an IPO, four people familiar with the matter said in May. Arabian Cement Co. raised $110 million that month in an offering, the country’s first since the 2011 uprisings.

“There will be some attraction for the company as it will be the first purely Egyptian mobile operator to be listed,” Ahmed Adel, an analyst at HC Securities & Investment in Cairo, said by phone. The mobile business in the country “has seen a significant growth rate over the past three years,” he said.

Etisalat Misr had revenue of 1.2 billion U.A.E. dirhams ($327 million) in the second quarter, an increase of 5 percent over the same period last year, according to parent company Etisalat’s financial statements. Earnings before interest, tax, depreciation and amortization were 500 million dirhams.

Etisalat has operations in 19 countries across the Middle East, Africa and Asia. The company’s shares closed little changed today in Abu Dhabi.

--With assistance from Tamim Elyan in Cairo.