Vicat clinches stake in Sinai

04 April 2003
The board of Sinai Cementhas approved an offer from Vicatof France to take a strategic stake in the company. The company convened a meeting of major shareholders on 26 March to discuss the terms of the bid, after rejecting three offers from a team of Egyptian Cement Company (ECC)with Palestine Commercial Services Company (PCSC). Both bidders proposed taking a stake in the company through a strategic capital increase, in return for a guarantee of three of the 11 seats on the board (MEED 28:3:03).

The offer submitted by Vicat proposes a capital increase of £E 100 million ($18 million) - raising the company's capital to £E 350 million ($61 million) - in addition to a £E 40 million ($7 million) premium.

Located in the northern part of the Sinai peninsula, Sinai Cement's 1.4 million-tonne-a-year (t/y) facility began production in early 2001. The company continues to record strong profit growth, despite declining domestic demand for cement and the start-up of new capacity over the past year.

Export sales have bolstered the income of many smaller Egyptian producers like Sinai Cement, which exported some 196,000 tonnes of cement last year. Despite the downturn in the local construction industry, there is still considerable interest from foreign investors in the cement market. In early March, CRHof Ireland reconfirmed its offer to acquire a 34 per cent stake in Misr Beni Suef Cement Company(MEED 7:3:02).

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