The Egyptian Ministry of Defense’s National Service Projects Organization (NSPO) has bought a considerable 20% share in Cairo-based energy distribution company TAQA Arabia, run by Egyptian CEO Pakinam Kafafi.
The transaction, which was completed via a block trade on the Egyptian Exchange, was worth a whopping EGP1.62 billion ($52.4 million) and was facilitated by Egyptian Financial Group Hermes Holding (EFG Hermes).
According to sources, NSPO purchased 240.47 million shares at an average price of EGP 6.02 ($0.194) per share, making it one of TAQA Arabia’s major shareholders. The investment demonstrates Egypt’s determination to expanding its engagement in the country’s energy sector.
TAQA Arabia, Egypt’s major energy and utility company, currently provides daily electricity to over 1.7 million consumers. The company specializes in the nationwide development and operation of energy infrastructure, as well as providing water treatment and desalination services to a diversified clientele.
The acquisition comes as no surprise given TAQA Arabia’s spectacular growth under the direction of Egyptian CEO Pakinam Kafafi, a top businesswoman in North Africa. Kafafi’s strategic vision has resulted in successful acquisitions and mergers with a number of gas distribution companies, including BG, ENI, Edison, and AMEC.
TAQA Arabia made headlines earlier this year when it launched 1.35 billion shares on the EGX under the utility sector, with an issued capital of EGP 676.17 million ($21.85 million). With NSPO’s recent investment, the energy distribution company’s market value has risen to EGP 13.1 billion ($423.9 million).
TAQA Arabia’s shares on the Egyptian Exchange were trading at EGP 9.69 ($0.313) at the time of writing, demonstrating investors’ increased confidence and interest in the company’s potential for further expansion.
The acquisition of a share in TAQA Arabia by NSPO is expected to have far-reaching consequences for Egypt’s energy sector, perhaps paving the way for additional substantial collaborations and developments in the country’s energy distribution landscape.