El-Farasha for Printing and Packaging plans to postpone offering 35% of its shares in the Egyptian stock exchange (EGX) until early 2018 to await the gains of the expansions carried out in 2015.
Ahmed Younis, head of investor relations at El-Farasha, said that the board of directors has decided to postpone offering the company’s shares in the EGX until either the end of this year or early next year, following the objections of the Egyptian Financial Supervisory Authority (EFSA) to the company’s fair value. The best option for the company is to wait until reaping the benefits of the recent expansions in order to enhance its fair value and present itself in a better way to the market through achieving high sales and profits that reflect the production expansions the company carried out in 2016, according to Younis.
Younis expected the company to achieve a major growth in 2017 sales by 82%, making sales reach EGP 1bn compared to EGP 550m in 2016, supported by the increase of the selling volume and prices. The volume is expected to improve greatly after adding new production lines in late 2016 with the aim of increasing the company’s production capacity from 15,000 tonnes to 33,000 tonnes per year in a gradual manner. The current capacity is estimated at 20,000 tonnes and is expected to increase to a maximum of 33,000 tonnes.
Selling prices have increased from EGP 35,000 per tonne in 2016 to EGP 52,000 per tonne at present; hence, sales in 2017 will witness a leap in terms of volume and value, which was not achieved in the 2016 budget.
The administration of the EGX has approved the listing of El-Farasha on its database starting late February 2016, with a capital of EGP 90m, distributed throuh 450m shares with a nominal value of 20 piasters per share.
The company had a plan to implement the offering mid-December 2016; however, gaining all necessary approvals has resulted in the postponement of the offering until February 2017, and a third postponement now will result in postponing the offering until early 2018.
El-Farasha was established in 2003 with the purpose of manufacturing printing and packaging materials and their derivatives, in addition to inks and plastic.
El-Farasha covers 25% of the production capacity of the Chipsy company, 40% of Sina Cola, 25% of Coca Cola, 100% of Henkel, 100% of El Maleka pasta, 40% of Regina pasta, 40% of Cadbury, 15% of Nestle, 30% of Egypt Foods, 100% of El Saa’a Rice, 20% of Mandolin Egypt, and 15% of Misr Café.
The company’s capital is estimated at EGP 90m. It owns two factories and four production lines.
Beltone Financial manages the offering process of El-Farasha’s shares in the EGX, whereas Zaki Hashem Firm handles the company’s legal consultations during the offerinig, while FinCorp Investment Holding is the financial adviser for the offering.