ASEC Cement, a subsidiary of Egypt-based Qalaa Holdings, has finalised the sale of ASEC Minya Cement and ASEC Ready Mix to Misr Cement Qena for a total of EGP1 billion ($127.7 million).

In addition to the proceeds generated for Qalaa, the sale of ASEC Minya and Ready Mix will result in a total of EGP940 million ($120 million) in debt deconsolidated at the ASEC Cement consolidated level, said a statement.

Qalaa had announced earlier this month that it had signed a sale and purchase agreement for the transaction, it said.

The execution of the ASEC Cement transaction came less than two weeks after Qalaa business unit Gozour signed a sale and purchase agreement to divest confectioner Rashidi El Mizan, putting Qalaa well on track to deliver on its strategy for FY2015, it added.

That strategy has focused on deleveraging at the holding and platform company levels; acquiring additional stakes in key platform companies and selective investments within existing platform companies. The company will also continue to study opportunities for share buybacks so long as its shares trade at a significant discount to their fair market value, it stated.

ASEC Minya Cement is an Egyptian cement producer located in Upper Egypt. It began commercial operations in August 2013, with a name plate capacity of 2.0 million tonnes per annum.

ASEC Ready Mix is a producer and distributor of ready-mix concrete, the company operates six batch plants in Upper Egypt with production in FY14 reaching 382,000 cu m.

At the time of sale, ASEC Cement held 46.5 per cent of ASEC Minya Cement and 55 per cent of ASEC Ready Mix. Qalaa and its subsidiary National Development and Trading Company (NDT) together own 70 per cent of ASEC Cement.

CI Capital Investment Banking was Financial Advisor and Arab Legal Consultants (ALC) served as Legal Advisors to Qalaa on the transaction.

Ahmed Heikal, chairman and founder, Qalaa Holdings, said: “We are pleased to announce that the sale process closed today, putting in place another cornerstone in our strategy to deleverage at both the holding and platform company levels.”

“Both ASEC Minya and ASEC Ready Mix have established themselves as critical players in the vital Upper Egyptian market, and we are honoured to have worked with an exceptional management team at each of them to build them into the companies they are today,” he added. – TradeArabia News Service