SODIC to kick off due diligence process and announce international advisor within days

We seek to score EGP600mln annual revenues out of properties as of 2024

UAE Aldar's entry into the Egyptian market mirrors the latter’s stamina

We adhere to governance and transparency, as clinching the deal will be beneficial for the two parties

We continue to execute our expansion plan and hope to offer Malaaz North Coast this summer

Heliopark land is subject to a scrutiny

We has credit facility worth EGP5.5bn, of which only EGP2.4bn is in use

Six  of October Development & Investment Company (SODIC) started to examine initial offer submitted by the UAE's Aldar Properties to acquire more than 51% stake in SODIC.

The UAE’s Aldar Properties is set to begin due diligence on EGX-listed Sodic within days, as it seeks a majority stake in the upmarket real estate developer, SODIC chief Magued Sherif said during SODIC's annual Iftar party.

Sodic has already begun providing “the necessary data” for Aldar to begin the process, Sherif said.

SODIC will tap an independent financial advisor to prepare the fair value assessment for the company, which will also require input from the company’s board of directors.

 Meanwhile, Aldar has 60 working days from the time it submitted its initial offer to start the examination. 

 Aldar submitted in March an offer to acquire at least 51% of SODIC’s shares at EGP 18-19 apiece, valuing the company at EGP 6.6 bn at the mid-point of that range. 

SODIC’s board said recently that it would allow due diligence to go ahead and will appoint EFG Hermes to advise the company on the bid.

SODIC will make an announcement on its choice of international advisors once an appointment has been made.

UAE's Aldar's decision to enter the Egyptian market reflects the latter’s  stamina and shows off how Arab business people see it as rife with promising opportunities.

Moreover, SODIC was chosen owing to its organizational and governance rules, together with the execution of groundbreaking projects adding value to the Egyptian market and overcoming all hurdles facing the market.

Expected rewards

Aldar's bid comes in response to SODIC'S outstanding track record and the trust clients have in the company, unburdening the UAE's from the need to study the market from scratch and assisting in branding.

On the flip side, SODIC will take advantage of  Aldar's wide experience and developmental capacity, he explained, adding that SODIC has a pre-existing scheme to make use of non-residential assets.

The acquisition deal will help the Egyptian market prove its ability to attract foreign capital and export properties, he asserted.

With its less emphasis on individuals, SODIC is an institution that is governed by stringent and organized policies, together with a robust financial position and ongoing expansion plans.   

Sodic has selected EFG Hermes as its domestic financial advisor. It will also appoint an international investment bank. 

Expansions

SODIC's expansion plan will be followed through, whether Aldar's deal is clinched or not, he explained.

SODIC took part in withdrawing bid requirements for 1695 acres land offered by Heliopolis Company for Housing and Development to use for building East Cairo's Heliopark, he added, noting that SODIC board is set to review the project.

Heliopark is situated in a distinguished location between the New Cairo and the New Administrative Capital, as the company is interested in purchasing a plot of land to the east of Cairo and mulls opportunities in NAC, he maintained.  

North Coast

Magiud Sherif expected SODIC to re-offer Malaaz North Coast this summer, adding that the company's close coordination and cooperation with the New Urban Communities Authority will help expedite the legalization process, as transferring jurisdiction of North Coast lands to NUCA is a boon for investments.

SODIC always mulls the investments opportunities and in case it found lands at North Coast fitting in with the company's plans, it will buy it, with it targeting areas ranging from 150 to 200 acres.

The company's focus on horizontal expansions means New Al-mein is unlikely to be an optimal choice.

Financial props

SODIC has obtained EGP5.5bn financial facility from lenders, of which EGP2.4bn funds are currently in use.

The company may tap securitization amid the ongoing delivery of its projects, he explained, adding that the remarkable sales of the first quarter of 2021 culminate the upbeat results the company achieved recently.

The company sets sights on utilizing its property portfolio with regular yields revenues, that is to say, leased properties, with the aim of generating annual revenues of EGP600mln as of 2024.