Citadel Capital Calls for Subscriptions to Rights Issue

Citadel Capital (CCAP.CA on the Egyptian Exchange) issued today a call for subscriptions to the EGP 1.05 billion capital increase via a rights issue recently approved by the firm's shareholders at an Extraordinary General Meeting. In accordance with Egyptian securities law, this call for subscriptions was released today in two national newspapers and in the Arabic language.

Highlights of the announcement include:

Amount of the Increase:

  • Raising the Firm’s capital by EGP 1,050,000,000 from EGP 3,308,125,000 to EGP 4,358,125,000 by issuing 210,000,000 new shares at a par value of EGP 5 per share. Newly issued shares include 157,500,000 common shares and 52,500,000 preferred shares.

Right to Subscribe:

  • All parties who are shareholders at the end of trading session on Thursday, 25 August 2011. Shareholders must subscribe to newly issued shares in their existing category of shares (common or preferred).
  • Subscription in this first round shall be on a pro-rata basis.

Subscription Period:

  • Subscription will open on 4 September 2011 and close on 3 October 2011. The subscription period may close at any time once the full value of the offering is covered.

In Case the Subscription is Not Fully Covered:

  • Should the entire value of the offering not be covered during the first round, the remaining shares shall be re-offered in a second round to all parties who are shareholders at the end of the trading session on Thursday, 25 August 2011. [Nota bene: This bullet point was amended on 2 October 2011 to accurately reflect the official Arabic document.]
  • The second round shall last seven days and shall be carried out on a non-pro-rata basis.

A more detailed summary of the Arabic-language original follows; section II of this summary will be of most particular interest to current shareholders:

Invitation to Shareholders of Citadel Capital S.A.E. Regarding Rights Issue

[Section I of the call includes standard regulatory information including:

  • Background information on the company — legal name, address, purpose of the company, commercial registration information, etc.
  • List of the members of the Board of Directors
  • Name of the Auditor of Record
  • Name of the Legal Consultant of record]

Shareholders holding more than 5% of current equity:

Name Current Shares Ratio of Current Shares to the Number of Shares Forming the Firm’s Capital
Citadel Capital Partners Ltd. 219,151,801 33.12%
Emirates International Investment Company LLC 55,362,835 8.37%

Capital (in EGP):

Currency Paid Issued Authorized Capital
Egyptian Pounds 3,308,625,000 3,308,125,000 6,000,000,000

Shares Issued:
661,625,000 including 496,218,750 common shares and 165,406,250 preferred shares.

Newly Issued Shares:
210,000,000 new shares including 157,500,000 common shares and 52,500,000 preferred shares.

Par Value:
EGP 5 per share.

[Section I goes on to note that the firm is not tax-exempt, that the firm is subject to one lawsuit in the Federal District of Columbia in which Citadel Investment Group LLC alleging trademark infringement. A second suit filed by Citadel Capital SAE against the Qatari Ministry of Trade in the Doha Court of First Instance relates to the registration of the trademark "Citadel" in the state of Qatar.]

Net Shareholders Equity as of 31/12/2010:
EGP 3,322,305,281

Distribution of the Firm’s Net Profits:
[Notes that this is in accordance with Article 56 of the firm's Articles of Incorporation]

Insured Assets:
Notes that this is not applicable.

Mortgages on the Firm’s Assets:
Notes that Citadel Capital’s shares in the National Development and Trading Company, in ASEC Company for Mining (ASCOM) and in United Foundries are attached to a US$ 167 million loan issued by Arab African International Bank representing all lenders.

Industry Risks:
General risks that the Firm may encounter in light of its field of activities.

Accounting Standards:
Egyptian Accounting Standards and all applicable Egyptian laws and regulations.

Related Parties Transactions:
All transactions with related parties and individuals are in accordance with codes of conduct set by the Board of Directors.

II. Subscription Information

Basis of the Increase:
Resolutions adopted at an Extraordinary General Meeting of shareholders held on 3 August 2011 and approved by the General Authority for Investment and Free Zones (GAFI) on 7/8/2011.

Amount of the Increase:
Raising the Firm’s capital by EGP 1,050,000,000 from EGP 3,308,125,000 to EGP 4,358,125,000 by issuing 210,000,000 new shares at a par value of EGP 5 per share. Newly issued shares include 157,500,000 common shares and 52,500,000 preferred shares. The value of the increase stands at EGP 1,050,000,000 exclusive of any issuing expenses.

Right to Subscribe:
All parties who are shareholders at the end of trading session on Thursday, 25 August 2011. Shareholders must subscribe to newly issued shares in their existing category of shares (common or preferred). Subscription in this first round shall be on a pro-rata basis.

Terms of Payment:
The total amount of the offering (EGP 1,050,000,000) shall be paid fully at a par value of EGP 5 per share.

Subscription Period:
Subscription will open on 4 September 2011 and close on 3 October 2011. The subscription period may close at any time once the full value of the offering is covered.

To Subscribe:
Subscription can be carried out at any one of 17 Arab African International Bank branches across Egypt. The advertisement lists these branches and their locations.

Required Documents:

  • National identification for individuals; copy of commercial registration certificate for corporate buyers
  • Document proving ownership of shares on the specified date in the advertisement.
  • Shareholder’s account statement issued by the custodian and indicating shares are owned on the specified date in the advertisement.

In Case the Subscription is Not Fully Covered:
Should the entire value of the offering not be covered during the first round, the remaining shares shall be re-offered in a second round to all parties who are shareholders at the end of the trading session on Thursday, 25 August 2011. [Nota bene: The preceding sentence was amended on 2 October 2011 to accurately reflect the official Arabic document.] The second round shall last seven days and shall be carried out on a non-pro-rata basis. Should there be more demand for shares than there are shares on offer in the second round, shares shall be allocated in proportion to each shareholder’s percentage of demand. Any amounts outstanding owed to shareholders due to over-payment in the second round shall be refunded one week from the end of the subscription period. This will be announced accordingly.

Planned Use of Earned Capital:
The sum earned in the subscription will be used to fund and support the Firm’s investments in platform and portfolio companies in accordance with the detailed disclosure of the increase.

Expected Returns from Earned Capital:
Support for the Firm’s strong balance sheet and provide funding for platform and portfolio companies and investments; strengthen the Firm’s ability to meet its goals in the coming period.

Key Financial Indicators:

  • Financial statements of the last three fiscal years;
  • Financial statement as at 31/12/2010 approved by the auditors

 

NB: In the event that the last day of the subscription period should be an official holiday, the final day of subscription shall be extended to the next working day.

The advertisement is noted as being issued on behalf of:
Ahmed Mohamed Hassanein Heikal
Chairman and Founder
Citadel Capital SAE