Citadel unit eyes exit from Algerian firm
Cairo, March 20, 2014
Citadel Capital, a leading regional investment company, said its subsidiary ASEC Cement is looking to divest its minority stake in Algeria's Zahana Cement Company as part of its drive to focus on majority-owned investments and drive efficiencies at core businesses.
ASEC Cement is a portfolio company of ASEC Holding, Citadel Capital’s subsidiary in the regional industry.
ASEC Cement holds a 35 per cent stake in Zahana, which is located in western Algeria 40 km away from the city of Wahran.
Yahia Bachir, the director general of Ciments Algerie (GICA), the Algerian holding company that controls all public-sector entities operating in the building materials sector, has publicly stated that the Algerian state is studying “buying out its Egyptian partner in a cement plant project.”
Citadel Capital has confirmed its interest in such an exit and is accordingly pursuing discussions to divest ASEC Cement’s minority stake in Zahana Cement Company of Algeria.
“We are presently in preliminary talks with GICA with a view to having ASEC Cement exit its minority investment in Zahana. This is in line with our aim going forward of holding only majority stakes in all of our core subsidiaries,” said Ahmed Heikal, the chairman and founder of Citadel Capital, the leading investment company in Africa and the Middle East.
“A key element of our growth strategy is to reduce risk by focusing on fully controlled investments that have proven to be winners,” stated Heikal. “A rebalancing of the individual holdings of certain subsidiaries will allow us to redeploy capital and thereby open new avenues for growth,” he added.
The talks come in the context of Citadel Capital’s transformation into an investment company that will hold majority stakes in most of its investments in five core industries, namely energy, transportation, agrifoods, mining and cement.
The acquisition of majority stakes in select investments is ongoing as a part of the firm’s bid to raise its capital to EGP 8 billion, an exercise that management expects will be complete in the coming three weeks.
In parallel, Citadel Capital will look to divest non-core holdings over the coming three or more years.-TradeArabia News Service
In addition to Zahana Cement, ASEC Cement holds a 68 per cent stake in a 3.6 MTPA greenfield cement plant near the Algerian city of Djelfa (under construction), as well as stakes in plants including Al-Takamol Cement (Sudan), Misr Qena Cement (Egypt), and ASEC Minya (Egypt) as well as successful trading and ready-mix arms.
ASEC Minya is the group’s most recent plant opening. The 2 MTPA, $360 million facility caters to high-demand Upper Egypt markets.-TradeArabia News Service