Egypt's Alexandria Cement received the go-ahead for a EGP2.45 billion ($442.1 million) rights issue scheduled to begin May 19, the stock exchange said.

The transaction will pave the way for Alexandria Cement's main shareholder, Greek cement maker Titan, to sell a 16 per cent stake in Alexandria to the International Finance Corporation (IFC) for 80 million euros ($106.6 million).

Titan has been struggling to cope with a shrinking business and to cut debt.

Alexandria has a free float of 11 per cent, according to Reuters data. Its share price leapt 19.7 per cent on Wednesday.

It will use the proceeds of the rights issue to buy 95 per cent of another Egyptian cement maker, Beni Suef Cement Co., which is also owned by Titan, it said in a February 28 letter to the exchange.

Alexandria Cement will pay Titan EGP3.13 billion for the stake, which will increase Alexandria's total stake in Beni Suef to 99.998 per cent.

Alex will not pay Titan for the Beni Suef shares in cash, but will book it as an outstanding debt to Titan, it said in the February 28 letter.

Titan has agreed sell the 16 per cent stake to the IFC once that transaction is completed. Titan expects to complete the IFC sale before the end of June, it said last month.

Titan last month reported a 41 per cent drop in profit in 2009 and slashed its dividend to save cash.

Alexandria Cement officials were not immediately available for comment. – Reuters