Qalaa Holdings, a leader in energy and infrastructure (CCAP.CA on the Egyptian Exchange), announced today that it has signed a debt settlement agreement with Banque Misr, Banque du Caire, Arab African International Bank and Al Ahli Bank of Kuwait whereby Qalaa settles the entirety of its debts for a total of EGP 4.547 billion as follows:

1.    Selling 239,120,667 shares (17.68%) in TAQA Arabia with Qalaa retaining the right to repurchase those shares within 5 years, and the banks having the right to resell those shares to QH in the sixth year.

2.    A registered 60,127 sq.m. land plot overlooking the Nile in Tibeen area.

3.    Compensations for variations in exchange rate and stock prices.

Moreover, Qalaa Holdings and its related companies signed a debt restructuring and settlement agreement with Arab International Bank through which loans due to AIB will be restructured and settled through the payment of c. USD 184 million over installments starting from 2024 till 2033. A variable interest rate equal to SOFR will be applied annually. AIB will also benefit from an enhanced security package.

“Qalaa has been resilient despite highly challenging macroeconomic conditions. The signing of these agreements represents a significant milestone towards our long commitment to settle and restructure our outstanding debt obligations, a step that will strengthen our financial position and will allow us to continue to push ahead with our ambitious growth and investment strategies,” said Qalaa Holdings’ Chairman and Founder Ahmed Heikal. “Over the past fifteen years, Qalaa's strategy has focused on establishing and developing a diverse portfolio of companies operating in various sectors, comprised of 11 sector-specific holding companies currently employing over 19,000 employees, all of which have reached profitability and maintained healthy debt levels. Qalaa takes pride in its success in starting up, sustaining and growing these portfolio companies in the face of unprecedented global and domestic challenges over the last 15 years. Amidst the onset of the COVID-19 pandemic era, Qalaa (at the holding level), embarked on a new phase aimed at debt reduction and optimizing asset utilization across its subsidiaries. This strategic shift was evidenced by a significant increase in operational cash flows, which were utilized for debt reduction and small incremental investments in subsidiary companies, approximately EGP 5 billion over the past three years. Consequently, this has led to a reduction in the debt/free cash flow from operations. The completion of this agreement with a consortium of Qalaa's lending banks marks the end of a significant milestone, although not the final one,” added Heikal.

"The debt settlement and its consequences play a pivotal role in simplifying our balance sheets/financial statements for our shareholders and analysts, thereby positively impacting our share price—a paramount objective for our management in the coming period. Our primary commitment in the upcoming period remains towards our shareholders whilst taking into consideration the challenging economic landscape Egypt is navigating, necessitating individuals who can contribute efficiently to the development, particularly in strategic sectors we operate in such as manufacturing, agriculture, and energy. In the subsequent phase, Qalaa will re-restructure its ownership across some of its subsidiaries, either by expanding or reducing its ownership. This phase will extend into prolonged/not so short span, during which the company will initiate a new wave of acquisitions through its subsidiary companies, alongside relatively low-risk export oriented, predominantly high local value-added strategic investments, complementing our existing operations.” Heikal Added.

“These agreements are the result of extensive and lengthy negotiation processes over an extended period and represent a major cornerstone in achieving Qalaa’s management priorities,” said Hisham El-Khazindar, Qalaa Holdings’ Co-Founder and Managing Director.  “This step will reduce our risk exposure, decrease financing expenses, and achieve capital gains, which will collectively contribute to the sustained creation of long-term shareholder value; “Management is confident in its ability to achieve more robust performance and to continue to push ahead with our growth strategies and invest in the various sectors we operate in over the coming years, “El-Khazindar concluded.

Transaction Legal Advisors:

These settlement agreements have been duly executed through the commendable efforts of the Zulficar & Partners Law Firm, acting on behalf of Qalaa Holdings and its subsidiaries, and Arab International Law Firm headed by Dr. Mohamed Hamouda, representing the consortium of Egyptian banks.

-Ends-

Previous Qalaa Holdings press releases on this subject and others may be viewed online from your computer, tablet or mobile device at qalaaholdings.com/newsroom.

Qalaa Holdings (CCAP.CA on the Egyptian Stock Exchange) is an African leader in energy and infrastructure. Qalaa Holdings builds responsible and sustainable businesses that add value to the economies and societies in which it does business. Formerly known as Citadel Capital, Qalaa Holdings controls subsidiaries in industries including Energy, Cement, Agrifoods, Transportation & Logistics, Mining and Printing & Packaging. To learn more, please visit qalaaholdings.com.

Forward-Looking Statements

Statements contained in this News Release that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Qalaa Holdings. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. Certain information contained herein constitutes “targets” or “forward-looking statements,” which can be identified by the use of forward-looking terminology such as “may,” “will,” “seek,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue” or “believe” or the negatives thereof or other variations thereon or comparable terminology. Actual events or results or the actual performance of Qalaa Holdings may differ materially from those reflected or contemplated in such targets or forward-looking statements. The performance of Qalaa Holdings is subject to risks and uncertainties.