Qalaa Holdings in negotiations to exit Sphinx Direct Investment

The structure of the deal depends on swapping Sphinx stock's for shares in oil companies

Qalaa Holdings has entered into serious negotiations to exit from Sphinx Direct Investment Management Company to benefit Al-Rajhi Group, a major contributor to Sphinx, and Financial Holding International, one of the shareholders in the Qalaa-owned companies.
The deal under negotiations is expected to swap shares in several companies, specifically in the field of oil.
Informed sources said the deal has two main key points. The first is to complete the restructuring of Sphinx after being separated from Pharos Investment Bank within the framework of Al-Taymour's acquisition of Qalaa's share in Pharos several months ago. The second is Qalaa exiting its secondary investments, such as Sphinx, in the framework of the strategic plan to transform it from a direct investment company to an investment holding company focused on key sectors of such as energy, logistics, cement and construction.
According to the sources, the negotiations are currently at the stage of structuring the deal and evaluating the assets of the exchange to determine the equivalent swap between Sphinx and the stock shares owned Al-Rajhi.
A statement disclosed by Qalaa Holdings in February 2015 revealed that Sphinx-managed assets are worth more than EGP 770m. Sphinx has been running three funds; the Grand View Fund, Turnaround Fund specialising in restructuring struggling small and medium-sized enterprises, and the AUC Studies Support Fund.
The sources added that the entry of a strong financial group, such as Financial Holding International, will inject new financial investments into Sphinx.
Sphinx announced earlier this year its intention to launch two investment funds. The first specialises in renting houses with a capital of $50m, while the second is in the field of energy, with a capital of $60m.
Plans to raise new capital or acquire new companies' shares will now be deferred until the completion of the company's restructuring process.
Qalaa Holdings announced in June that Financial Holding International will be a party to the restructuring of some of Qalaa's investments, including its stakes in MENA Homes, Grandview and Dina Farms Land Companies, which will be separated from Dina for Agricultural Investments.
On the other hand, Qalaa will buy shares currently owned by Financial Holding International in several subsidiaries, including ASEC Holding in the cement and construction sector, and Arabi Enertech Company and Mashreq Petroleum in the energy sector, as well as Nile Logistics company operating in the transport and logistics sector, and a Dina Farms supermarket chain in the retail sector, in addition to the United Company for foundries in the metallurgical industry sector.