Orascom Development Egypt (ODE), the largest subsidiary of Orascom Development Holding in Egypt, has sold its entire stake in Tamweel Group, representing 87% of the company, to a consortium led by Ebtikar for Financial Investment, at a total value of CHF 20 mn (nearly EGP 360 mn), Invest-Gate reports.

“The share transfer has been executed after obtaining all necessary approvals and ODE will now start receiving the [EGP 313 mn] cash proceeds,” the real estate developer said in an official statement on June 17, revealing that the transaction was carried out in Ebtikar-led consortia with TCV1 and Acquire for Investment.  

“The cash proceeds resulted from the sale is geared towards our earlier communicated debt reduction plan, which entails further reducing our outstanding debt balance in 2019, and thus, enhancing our balance sheet,” ODE underlined.

On June 12, ODE has signed a debt rescheduling package, worth about EGP 3.82 bn, a step coming to boost the company’s balance sheet and generate more flexibility in growing its projects, it announced in a previous release, emphasizing that the company’s lenders agreed to decrease the interest rate margin on the foreign currency debt by 100 basis points – or 1%.

According to the statement, the move is foreseen to minimize the firm’s weighted average cost of debt from 10.5% to 9.3%, leading to annual savings of CHF 4 mn (EGP 70 mn) in interest payments for 2019, alongside a total of CHF 19 mn (EGP 320 mn) from 2019 to 2024. In addition, “The transaction involves the immediate cash payment of [EGP 325 mn], out of a total [EGP 650 mn], with the remaining to be paid by end of June.”

Ebtikar, a joint venture between MM Group for Industry and International Trade (MTI), B Investments Holding, and BPE Partners, owns a 45% stake in Tamweel Group, while B Investments holds a 20% stake in Ebtikar. Meanwhile, Tamweel Group is a major player in the Egyptian market, with four companies operating in mortgage finance, factoring, leasing, collection, and insurance brokerage.