EFG Hermes completes advisory on $323m private placement

Driven by pent up demand, the private placement of Ali Alghanim and Sons Automotive Company on Boursa Kuwait was oversubscribed approximately 11 times



The upcoming IPO marks a significant milestone for EFG Hermes, as this is going to be the firm’s first IPO on the exchange where it acted as joint bookrunner for the offering. — File photo
The upcoming IPO marks a significant milestone for EFG Hermes, as this is going to be the firm’s first IPO on the exchange where it acted as joint bookrunner for the offering. — File photo

By Staff Report

Published: Tue 7 Jun 2022, 4:59 PM

EFG Hermes, the leading investment bank franchise in Frontier Emerging Markets (FEM), has announced that its investment banking division has successfully completed advisory on Ali Alghanim and Sons Automotive Company’s $323 million private placement ahead of the initial public offering (IPO) on Boursa Kuwait.

The upcoming IPO marks a significant milestone for EFG Hermes, as this is going to be the firm’s first IPO on the exchange where it acted as joint bookrunner for the offering.

Ali Alghanim and Sons Automotive Company, an official distributor of coveted vehicle brands in Kuwait, Egypt, and Iraq, listed 124.8 million shares today — representing 45 per cent of its share capital — at a price of 793 Kuwaiti fils per share, implying a market capitalisation of $717 million and making it the first IPO in the Kuwaiti Stock Market Since 2020. The private placement ahead of the IPO garnered strong demand from investors, and was oversubscribed approximately 11 times with a total demand of more than $3 billion. The stock’s trading commenced on June 7.

“The fact that our first listing in Kuwait will also be the first IPO to come out of the market since 2020 is proof positive of the traction we’ve built in the GCC and underscores our ability to bridge the gap between global capital and compelling local opportunities even amid challenging market conditions,” said Mohamed Abou Samra, managing director of EFG Hermes’ Investment Banking division.

“The GCC has seen fresh listings recently as countries in the region work to deepen their capital market under the umbrella of wider-scope economic reform plans. Kuwait in particular is expected to see renewed interest in the market, as evidenced by the solid demand from a multitude of local, regional, and global investors on the listing of Ali Alghanim and Sons Automotive. We expect to continue to capitalise on this uptick in activity, having already lined up several ECM transactions in the region in the year ahead.

Companies in the GCC have raised over $22 billion in primary and secondary offers in the past 12 months. The entry of Kuwait in the key emerging market indices in 2019-20 means that the market is now on the radar of fund managers investing hundreds of billions of dollars. Recently, EFG Hermes’ Investment Banking team have succeeded in identifying and closing successful cross-border transactions in the GCC, such as the UAE-based Agthia Group’s acquisition of Kuwait’s Al Faysal Bakery and Sweets that they completed last year.

The listing is an integral step towards institutionalization and aims to diversify the shareholder base, enhance corporate governance, and broaden Ali Alghanim and Sons Automotive network and visibility among key stakeholders. With distribution spanning Kuwait, Egypt, and Iraq, it offers investors access to a large and growing automotive market in the region.

Established in 1986, Ali Alghanim and Sons Automotive Company is a pioneer in the automotive sector and has grown to become home to some of the world’s most luxurious automotive brands in Kuwait. Its facility extends over 22,000 square meters of land, and it operates one of the largest showrooms in the world.

Just this year, EFG Hermes’s investment banking team advised on Borouge plc’s IPO worth $2 billion, and Dewa’s IPO, the largest ever in Dubai at a value of $6.1 billion. In 2021, it closed 41 ECM, DCM, and M&A transactions, with an aggregate value of over $7.9 billion, throughout its footprint and garnered numerous accolades as a result, including ‘Best Investment Bank in Frontier Markets’, ‘Best Debt Bank in Africa by Global Finance’, ‘Best Corporate and Investment Bank in Egypt’ by Asiamoney, as well as ‘Best Investment Bank in Egypt’ and ‘Best Equity House in the UAE’ by EMEA Finance.

— business@khaleejtimes.com


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