Ezz Steel Company announced the fair value study of the company’s share prepared by BDO Keys Financial Consulting Company for Securities.
According to today’s disclosure, Monday, the study concluded that the fair value of Ezz Steel’s share is EGP 138.15, using the weighted average of the income and market approaches.
Ezz Steel Company confirmed that it chose the highest price ever in the company’s history to determine the delisting price, amounting to EGP 120 per share.
The company said, in a statement in response to investors’ inquiries, that the delisting price exceeds the average share price in 2023 and 2024 by 156% and 35% respectively, and the delisting price in dollar terms exceeds the annual average share price in dollars by between 75% and 426%; for the years from 2015 to 2023, and by 33% over the average for 2024 alone.
She explained that the latest assessments issued by the research department of the largest Egyptian investment banks since last September until January ranged the price estimate for the share in the basic case between EGP 115.00 and EGP 120.21, which is the same range as the recommended delisting price despite the difference in its economic, industrial and financial orientations.
She confirmed that she does not plan to sell any of her shares to Arab or foreign investors, noting that she has not received any offers from investors to buy a share of the company’s shares.
Ezz Steel also stated that it has a market share of rebar in the Egyptian market of around 40%, despite the increased competition from other Egyptian factories that have begun investing in vertical integration.
She pointed out that the local production capacity exceeds the market’s capacity by more than double, and therefore competition will remain strong for the coming period, in addition to the fact that if steel production capacities increase, there will be a tangible adverse effect given that the gradual increase in consumption will need no less than 10 years to reach the actual available production capacity.
She also pointed out that she is working hard to maintain her position as one of the most important Egyptian exporters, as she exported about 1.07 million tons of rebar in 2024.
Despite the export quota imposed by the European Union as of the second half of last year, flat steel exports reached 1.4 million tons in 2024, however, the company warned that the level of exports will be negatively affected if Europe imposes dumping fees on the company.
She explained that the most important threat to the company’s exports is the expansion of trade wars and restrictions imposed in countries around the world on steel imports; including protective fees, increasing customs duties, setting export quotas, and dumping lawsuits.
She noted that most countries in the world have moved to implement measures to protect their local steel industry, while this has not started effectively in Egypt yet, which causes the local market to be penetrated by imported flat steel products and steel squares “billets”.
This places the burden of unfair price competition on Egyptian iron and steel companies, led by Ezz Steel.
Another threat to the company’s exports is the difficulty of disposing of its flat steel production if the European Union imposes dumping fees as a result of the ongoing investigations, which would force the company to reduce its production or stop one of its factories, repeating what happened as a result of the trade wars from 2017 to 2020, when flat steel production in Suez was stopped for 24 months.
Ezz Steel recorded net profits of EGP 2.275 billion after taxes during the first half of this year, compared to losses of EGP 809.7 million in the same period last year.
Sales revenues amounted to about EGP 100.684 billion in the first half of 2024, up from EGP 62.262 billion in the first half of 2023.
Ezz Steel Company decided to call for an extraordinary general assembly to convene on Tuesday, January 28, to approve the optional delisting of the company’s shares from the Egyptian Stock Exchange and to purchase the shares of those affected by the optional delisting at the highest closing price during the month preceding the date of the Board of Directors’ decision to call the general assembly or the average closing prices during the three months preceding that, or the fair value of the share determined by the independent financial advisor.
The assembly is scheduled to approve the fair value study prepared by the independent financial advisor and the auditor’s report on it.
It will also discuss opening a temporary account called the optional delisting shares account, the purpose of which is limited to implementing the purchase of shares of shareholders affected by the delisting, provided that this account is financed by the company as a third party.