Egypt’s leading steel company, Al Ezz Dekhelia Steel, has secured regulatory approval to buy an 18-percent stake in the Egyptian Steel Company in a deal worth EGP2.5 billion ($159.2 million).
In line with the proposed share-purchase agreement, the deal will see Egyptian businessman Ahmed Abou Hashima and related entities pocket $159.2 million from Egyptian tycoon Ahmed Ezz’s steel company Al Ezz Dekhelia in exchange for an 18-percent stake in Egyptian Steel.
Al Ezz Dekhelia is Egypt’s largest steel company. It operates as a subsidiary of Ezz Steel, a market leader in Africa. Ezz Steel has a total steel production capacity of 7 million tonnes per year.
Ezz was the chairman and managing director of Al Ezz Dekheila until he was forced to submit his resignation in 2011 following allegations of corruption.
According to a bourse filing, the 18-percent stake represents ownership rights in Egyptian Steel.
Before the deal’s announcement, Al Ezz Dekheila controlled 53 percent of the steel market, while the Egyptian Iron and Steel Company held a 23-percent position.
The share-purchase deal will see Ezz Steel take over a substantial percentage of Egypt’s iron and steel market, with a total market share of 76 percent.
The move to take over shares owned by Abou Hashima comes six months after Ezz acquired an additional 33.4-percent stake in Ezz Steel, raising his equity position to 65.7 million.
Billionaires.Africa earlier reported that Ezz gained EGP1.11 billion ($71.03 million) in October, as shares in Ezz Steel surged by double digits due to sustained buying interest in the steelmaker.
