Qalaa Holdings, an African leader in energy and infrastructure, said its subsidiary Mena Glass has announced plans to sell its entire stake in two of its units - Misr Glass Manufacturing Company (MGM) and United Glass Company (UGC) - for E£828 million ($105.4 million) as part of its new divestment strategy.

The company signed an agreement with Middle East Glass Manufacturing Company for the sale of its stake in MGM, a leading producer and exporter of glass containers across the Middle East and North Africa.

In another deal, the entire stake in UGC was bought by MGM Holding, said the statement from Qalaa.

The deal is likely to be closed in the first quarter of 2016 as soon as the purchasers complete their funding of the transactions,. it stated.

Qalaa Holdings currently has an effective ownership of 15.2 per cent in MGM and UGC.

Commenting on the deal, Qalaa co-founder and managing director Hisham El Khazindar said: "As our fifth disposal announcement this quarter, the transaction underscores both our commitment to divesting non-core operations and our ability to conclude deals at the right valuations."

"It has been a pleasure to work with the team at MGM to help it capture new opportunities. We now look forward to watching it grow under the stewardship of Middle East Glass as we ourselves focus on our core investments," he added.

According to him, the exit helps to accelerate the delivery of Qalaa’s strategy which includes deleveraging at the holding and platform company levels.

It involves acquisition of additional stakes in key platform companies; selective investments within existing platform companies; and share buybacks so long as the company’s shares trade at a significant discount to their fair market value, stated El Khazindar.

Qalaa has plans to divest some of its stake in other key companies to support its strategic goals.
Already it is in advanced stages of negotiations for several divestments, including Dina Farms and Asec Cement’s operations in Algeria (Zahana Cement Company and Djelfa Cement Company).

Qalaa had recently announced exiting its investments in confectioner Rashidi El Mizan, cheese manufacturer El Misrieen, and cement companies Asec Minya and Asec Ready Mix.

As part of its transformation into a holding company, Qalaa has since 2014 divested non-core assets including Sudanese Egyptian Bank, float glass manufacturer Sphinx Glass, two metallurgy subsidiaries of United Foundries Co, and investment bank Pharos Holding.

Pharos Holding acted as financial advisers, and Zaki Hashem Law Office acted as legal counsel, to the sellers on the transaction.-TradeArabia News Service