Orascom Hotels Holding Company, Egypt's largest private hotel company, is to raise LE200 million in a bond and share issue. (US$1=LE3.4) The plan replaces the company's earlier intention to raise between $80 million and $100 million by issuing global depository receipts in London. That proposal was shelved in March due to poor market conditions.
OHH's second-quarter earnings are expected to show a net profit of between LE 500,000 and LE 600,000, compared with LE 268,000 in the first quarter. The company will issue new shares, to raise around LE 100 million, between LE 8.0 and LE 8.5 each.
The bonds, also worth about LE 100 million, will be non-convertible, with a seven-year maturity and an interest rate of 14.25 percent
Orascom Hotel Holdings is up from its record low of LE 5.73 on 26 June, and looks healthy on the technical scales. Trading below its par of LE 10, the company has been forced to undergo its capital increase at a price of LE 8, and will use its reserves to cover the residual. With tourism continuing to reach historic highs, OHH is set to benefit first hand from these inflows.
Furthermore, the company has an advantage over other sectors in the market since a significant portion of their revenues are based in dollars, while companies in the edible oil industry, pharmaceuticals, and some construction companies will continue to suffer from tight domestic liquidity. –(Albawaba-MEBG)
© 2000 Mena Report (www.menareport.com)
