Qalaa Holdings gets LE 162M from sale of Bonyan

CAIRO – 3 July 2018: Qalaa Holdings announced that its subsidiary MENA Home Furnishings sold its whole stake of Bonyan for Development and Trade (Bonyan), to Compass.

Bonyan for Development and Trade (Bonyan) was wholly owned by MENA Home Furnishings.

The company clarified in a press release that net equity proceeds payable to Qalaa Holdings for the sale amounted to LE 162 million.

The release noted that the losses incurred due to the MENA Home Furnishings exit have been reflected in Qalaa Holdings’ 2017 end of year results.

Furthermore, the deal included the settlement of bank debts, whereby Compass settled bank liabilities and assumed liabilities to third parties amounting to LE 340 million, and acquired the principle of the MENA Home Furnishings shareholder loan to Bonyan, amounting to LE 272 million, for an undisclosed amount.

“The sale of Bonyan falls under our strategy of divesting non-core businesses, allowing us to focus more resources and management bandwidth on Qalaa Holdings’ energy and infrastructure platforms,”Qalaa Holdings Co-Founder and Managing Director Hisham el-Khazindar said.

“Proceeds from the transaction will be allocated to deleveraging at the holding and subsidiary levels as our company gears up for commercial start at the Egyptian Refining Company (ERC) and pushes forward growth initiatives at portfolio companies, including TAQA Arabia, Egypt’s largest private sector energy distribution business; Tawazon, a regional pioneer in the solid waste management industry; and Nile Logistics,” Khazindar added.

For his part, Compass Founder and Chairman Shamel Aboul Fadl said: “Compass has a proven history of unlocking value in unique assets, and we view Egypt’s current economic trajectory as an opportune moment to increase our exposure to the nation’s fast-growing commercial real estate market.”

“The asset we are acquiring is an award-winning development offering significant growth and revenue-generating opportunities given its location in the heart of Sheikh Zayed. The city’s increasingly affluent and growing community, coupled with the rising demand for outdoor activities and quality entertainment facilities, make it a unique investment opportunity,” Aboul Fadl added.

Compass Capital was the buy-side advisor while TMS Law Firm served as legal counsel for the buyer.

According to the release, Qalaa Holdings owns indirectly 60 percent of Bonyan, noting that the sale of Bonyan falls within its strategy of divesting non-essential assets and significantly reducing financial risk by deleveraging at the holding and platform company levels.

Qalaa Holdings recorded a loss of LE 183.95 million including minority rights in the first three months of 2018, compared to LE 596.08 million during the same months of 2017.

Qalaa Holdings operates within the diversified financial sector focusing on asset management and custody banks. It has companies operating across North America, the Caribbean, and Northern and Eastern Africa. It was established in April 2004.