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Cleopatra Hospital to offer 25pc stake to public

CAIRO, May 5, 2016

Egypt’s Cleopatra Hospital Company plans to raise capital through a secondary offering of shares followed by a closed subscription to support its expansion and growth plans.

The company intends to offer up to 40 million existing ordinary shares representing 25 per cent of the company’s outstanding share capital listed on the Egyptian Exchange (EGX) currently owned by the selling shareholder.

The offering will include an International Offering to institutional investors and an Egyptian Retail Offering to retail investors in Egypt (combined offer). The International Offer Shares and the Egyptian Retail Offer Shares will be offered and sold by the selling shareholder at the same price (the “offer price”). All of the proceeds from the combined offer will be received by the selling shareholder.

Following completion of the combined offer, the company will offer to the selling shareholder by way of a closed subscription the right to subscribe for up to 40 million new shares at the Offer Price.

The purpose of the Combined Offer and the Closed Subscription is to raise capital for the company through an increase of its share capital. Net proceeds will be deployed to fund the company’s growth plans.

Chief executive officer Dr Ahmed Ezzeldin said: “Cleopatra is the largest private hospital group in Egypt when measured by number of hospital beds or number of operating hospitals. Our hospitals have a track record dating back to 1976, and today all four hospitals offer high-quality care to a fast-growing market segment.”

“Together, they aim to become the leading integrated healthcare provider in Egypt, offering a platform of world-class quality medical facilities and services to enhance patients’ quality of life. Proceeds from the offering of Cleopatra Hospital company shares will be re-invested in growth, funding our capital expenditure plan as we develop extensions of Al Shorouk Hospital and Cleopatra Hospital, as well as the acquisition of a site in New Cairo to develop into a new hospital.”

The Group owns majority stakes in four hospitals in the Greater Cairo Area, with plans to open polyclinics to penetrate new catchment areas and urban communities through a hub-and-spoke business model. It is also studying long-term expansion outside the capital city area.

The Group’s four hospitals — Cleopatra Hospital, Cairo Specialized Hospital, Nile Badrawi Hospital and Al Shorouk Hospital — are multi-specialty hospitals that offer a full array of general and specialized healthcare services.

The company plans to develop centres of excellence in each of the hospitals in separate specialised medical fields, such as renal transplantation and oncological radiotherapy.

On an unaudited, pro-forma basis , the Group reported operating revenues of EGP741 million ($83 million) in 2015, while gross profit stood at EGP234 million, EBITDA at EGP183 million and net profit for the year was EGP52 million.

“Egypt is a market that exhibits characteristics of both emerging- and developed-market healthcare systems. The country has a young, fast-growing population that we believe is increasingly health conscious; in parallel, Egypt has a large aging population in absolute terms and is characterized by an increasing incidence of lifestyle-related medical conditions,” added Ezzeldin.

“The market is forecast to grow by a CAGR of 17.6 per cent from 2015 through 2019, offering compelling upside potential for a hospital group that enjoys the benefit of a leading market position, reputable brands, a seasoned management team, and a clear growth strategy.”

EFG Hermes Promoting & Underwriting is sole global coordinator and bookrunner for the offering. Freshfields Bruckhaus Deringer LLP is international counsel to the issuer, while Zulficar & Partners are local counsel. Shearman & Sterling (London) LLP is international counsel to the sole global coordinator and bookrunner, while Matouk Bassiouny is local counsel.  – TradeArabia News Service




Tags: Egypt | share offering |

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