ASEC Holding, a cement-focused platform company of Citadel Capital, has acquired an additional 9.48 percent in one of its portfolio companies ASEC Cement for $80 million in equity and shares, from Abu Dhabi-based Emirates International Investment Company (EIIC).
The deal ups ASEC Holding’s stake in ASEC Cement to 61.04 percent, a Citadel Capital statement noted. It also values ASEC Cement at EGP14.68 ($2.67; €2) per share, Hisham El-Khazindar, Citadel managing director and co-founder, said in the statement.
EIIC is a Citadel shareholder and a limited partner in its opportunity-specific funds. The transaction will be partially financed via the issue of ASEC Holding shares to EIIC worth $32.5 million, at EGP28.50 per share. EIIC will continue to have exposure to ASEC Cement via its 13.6 percent interest in ASEC Holding, according to the statement.
This follows Citadel’s sale of a 6 percent stake in ASEC Holding to EIIC in December 2009, which valued ASEC Holding at the same price of EGP28.50 per share. The partial exit was part of the firm’s strategy to diversify its portfolio, Ahmed Heikal, the firm’s chairman and founder, said at the time.
Citadel will note revenues of $880,000 as carried interest on this transaction, the statement said. The firm earns revenues via a carried interest over a hard hurdle on capital gains from divestments made by limited partners in its opportunity-specific funds; capital gains on its principal investments; and management fees on equity it controls, it added.
In December 2009, Citadel listed its shares on the Egyptian Stock Exchange in a bid to facilitate capital-raising in the future. The firm’s management did not sell any shares, Heikal said then.
Cairo-based ASEC Holding controls cement production, construction and engineering assets operating throughout the Middle East and Africa. Its portfolio companies include ASEC Cement, cement plant manager ASEC Engineering, turnkey contractor ARESCO and civil and steel fabrication business ESACO. Its shareholders include Citadel, EIIC and investment holding company Cape Collard Investments.
ASEC Cement aims to control more than 12 million tons in production capacity annually by 2013. The company’s production assets are also on schedule to span five countries from Algeria to Iraq-Kurdistan in the same period, the statement noted.