Citadel Capital, a leading investment company in the region, has signed a sale and purchase agreement to acquire a 49 per cent stake in float glass manufacturer Sphinx Glass from DH Investors Limited.

Meanwhile, DH Investors Limited has confirmed it will participate in Citadel Capital’s upcoming EGP3.64 billion ($521 million) share issuance.

“We have reached today a sale and purchase agreement (SPA) that will see Citadel Capital acquire an additional 49 per cent stake in Sphinx Glass, a leading producer of float glass and portfolio company of GlassWorks,” said Citadel Capital founder and chairman Ahmed Heikal.

“The selling party will be DH Investors Limited, a valued long-term co-investor of Citadel Capital.

“At the same time, I am pleased to announce that DH Investors Limited will simultaneously be subscribing to our new share issuance, provided the issuance receives shareholder approval at the upcoming extraordinary general meeting,” Heikal added.

The value of the transaction under the SPA, which covers 100 per cent of DH Investors Limited’s ownership of Sphinx Glass, was not immediately disclosed.

Citadel Capital is transitioning its business model from private equity to that of an investment company. Citadel Capital shareholders will meet on October 9 to approve the EGP3.64 billion share issuance at par value (EGP5) that would see the firm’s paid-in capital rise to EGP 8.0 billion.

The proposed capital increase would be used to reach 51-100 per cent ownership in most of its core platform companies, in particular the firm’s subsidiaries in its five core industries: energy, transportation, agrifoods, mining and cement.

GlassWorks is Citadel Capital’s platform company in the regional glass manufacturing industry and includes portfolio companies Sphinx Glass and Misr Glass Manufacturing (MGM). Sphinx Glass owns a 600-ton-per-day, 220,000 sq m greenfield float glass production facility in Sadat City. The company began full operations in April 2010 and is a leading supplier to both export and domestic markets.

Sphinx Glass reported an 18.0 per cent year-on-year rise in sales in the first half of 2013 to EGP 179.4 million, while EBITDA in the same period rose 45.8 per cent to EGP 50.3 million.

The acquisition from DH Investors Limited, when executed, will give Citadel Capital an effective 59.7 per cent stake in Sphinx Glass. – TradeArabia News Service