Established to spearhead the transformation and development of the Egyptian economy, NI Capital offers a range of financial services intended to maximise the value of untapped sovereign public assets, encouraging private sector investment and revitalising capital markets.
The company, driven by experienced professionals from the private sector, aims to leverage our unique positioning and network of domestic and global players to bridge the gap between the private and public sectors and create value for clients, partners, and the wider Egyptian economy. Ashraf Ghazaly, founder CEO & MD, in an exclusive tête-à-tête with International Finance talks about NI Capital’s growth story, while Ihab Swellem, managing director of Investment Banking Advisory Services, discusses in detail about the company’s critical role in investment banking and its flagship IPO program.
NI Capital—The Journey to Egypt’s leading financial services provider
Egypt is at a critical inflection point and a major investment destination in the region. How is this helping your industry and company grow?
Ghazaly: Egypt is at a turning point, and there is no better time to capture the opportunities it presents and capitalise on its potential upside. After a long period of economic uncertainty and political transition, Egypt is re-emerging as a destination of choice for global investors. Recently, the government has embarked on a major economic reform program that is already bearing fruit, including the liberalisation of the exchange rate, fiscal consolidation measures and regulation aimed at improving the business environment. There are also signs of broader long-term recovery with the floatation of the Egyptian pound proving a stimulus to local manufacturers and import-substitute plays. The improving financial climate and enhanced domestic productivity has spurred investments into the country, with its pipeline expected to grow in the coming years on the back of expressed interest from countries across the region and beyond.
Can you take us through the main financing activities of NI Capital?
Whether providing financing opportunities or raising capital, we are dedicated to bolstering Egypt’s business community through providing highly tailored solutions aimed at maximising returns, productivity and liquidity. We recognise the importance of forming partnerships to achieve this, and, to that end, have worked side by side with strategic investors, public fund and peers in the industry to find innovative solutions aimed at fuelling start-ups, SMEs and larger lucrative enterprises—the foundation of Egypt’s growth and advancement.
NI Capital provides a broad range of solutions tailored to specific requirements of individual, institutional, corporate and government clients. We have an investment banking advisory department currently advising the Egyptian Government on its IPO program, an investment management division which manages investments for Ayady, a Government vehicle focused on sustainable development. Recently, we spun off our consulting services into a separate company—NI Consulting—which is helping restructure government entities to ensure maximum impact. NI Capital works closely on a number of cross ministerial strategic national projects.
Tell us more about your investment management arm and your subsidiaries?
NI Capital’s Investment Management division focuses on promoting impact investments geared towards Egypt’s sustainable development as well as encouraging private investment in the country. We adopt a consistent and disciplined investment process across pre-identified asset classes with our fiduciary responsibilities to our clients being the core of our team’s focus. We work diligently to understand our clients’ needs, offer informed advice and execute strategies to generate excess returns and achieve sustainable development goals.NI Capital’s value proposition is its ability to leverage its quasi government structure to bridge the gap between private and public to achieve double bottom-line investment returns.
NI Capital’s investment management division has been mandated Ayady Portfolio Companies as the strategic investment advisor for a number of prominent funds, managing their respective portfolios for the life of each investment to ensure that they are value accretive both economically and socially and in line with their investment objectives. Ayady invests in multiple industries with a focus on high-impact sectors including real estate development, financial services, media and media technology and health care.
Ayady Portfolio Companies
- Enmaa Leasing Company is a joint stock financial leasing company offering multiple Sharia’a-compliant leasing solutions for large companies as well as small and medium enterprises
- Ayady Masr Developments is a real estate development company, focusing on un-utilised government real estate assets
- Damietta Furniture City DFC is a 331-acre furniture manufacturing industrial complex in Damietta that aims to develop the furniture manufacturing sector in Egypt and attract domestic and foreign investment. DFC is the first of its kind specialised industrial zone in Egypt aiming to increase furniture exports and satisfy local demand
- Tamweely is a microfinance provider established in 2017, focusing on the underserved market in Upper Egypt, the Delta area and Greater Cairo. Tamweely offers a variety of financial products and services backed by technological solutions and hybrid distribution channels to micro and small enterprise entrepreneurs
- Egypt Venture Capital Company (EVCC) invests in distressed asset pools, then conducts restructuring services to create value
- Ergo, Media Ventures is an investment company managed which focuses primarily on investing in digital and traditional media content, distribution and enablers to support and empower promising talents ultimately advancing the media and film industries
Why is asset optimisation important for the government, and in turn, how does that improve your business offerings?
The Egyptian government has recently applied a greater emphasis on asset optimisation, which is focused around improved efficiency and better management of the assets under its control. As part of our mandate. NI Capital’s objective is to help improve the performance of these public assets, bringing in private sector involvement and investment where necessary. Diverse in nature and large in size, government-owned assets present a clear investment opportunity when managed correctly, and their improved performance can cause a significant boost to Egypt’s economy. Our role is to improve investor confidence in these public assets and foster synergetic relationships between the government, private sector investors and third parties through our team’s deep private sector investment insight.
What lies in the immediate future for NI Capital?
As a subsidiary of the National Investment Bank, NI Capital is fully aware of its responsibility towards its clients, partners and the Egyptian economy. NI Capital is devoted to contributing to the development of Egypt’s economy, ensuring sustainability and promoting public welfare, while simultaneously creating value for all stakeholders.
Investment Banking reigns supreme for NI Capital
Tell us a bit about NI Capital’s offerings in Investment Banking, and why is it such an important business vertical?
Swellem: Our Investment Banking Advisory division delivers strategic advice and creative financing solutions. Our services include financial advisory, capital markets advisory and corporate finance covering services from equity and debt capital markets, private placements to mergers and acquisitions, divestitures and others. NI Capital’s success is attributed to a culture that fosters collaboration on a national and global scale, a keen sector focus that supports in-depth understanding of factors impacting our clients, years of experience structuring and negotiating complex transactions and a dedication that comes from a team that knows first-hand the responsibilities of being an investor and entrepreneur. Our experts employ a rigorous analytical approach coupled with deep product and industry expertise to meet our clients’ short and long-term strategic objectives.
What is NI Capital’s role in the IPO program?
NI Capital is mandated by the Egyptian Cabinet to act as the Sole Financial Advisor to the Egyptian Government for the IPO program. The IPO program is a long-term program that will see several state-owned enterprises (SOEs) either listing on the Egyptian Stock Exchange (EGX) for the first time or increasing their free float. The objectives of the IPO program are multipronged, aiming at increasing the depth and breadth of the EGX, gradually improving corporate governance functions to previously privately held SOEs and allowing wider investors access to successful SOEs. The IPO program is designed to widen the ownership base of publicly owned companies offered to both retail and institutional investors in Egypt and beyond, improve the stock market liquidity, attract foreign investors, enhance transparency and corporate governance in the state-owned enterprises, introduce new sectors into Stock Exchange and diversify the State’s funding sources. NI Capital is responsible for the overall strategy and mechanics of the IPO program, serving as sell side advisor to the selling shareholders, we are involved in every step of the lengthy process from the hiring of all advisors to the closing of the transaction.
What are the steps taken so far by NI Capital in the IPO program?
Since our appointment as sole advisor to the Government for the IPO program, NI Capital has studied close to 600 SOEs, to determine which companies are to be potentially listed in the first phase. Companies are picked depending on the their track record, current and potential demand to guarantee sustainability, dollar income and profitability, asset management, future plans, and operating management.
23 companies have been shortlisted of which several tenders have been announced with full RFP processes run and winning consortia awarded as follows:
- CI Capital, Jefferies bank, and Emirates NDB to manage the sale of a 24 percent stake in state oil company Engineering for Petroleum and Process Industries (ENPPI)
- EFG Hermes for Eastern Company’s 4.5% stake sale
- HSBC for Alexandria Mineral Oils Company AMOC
- EFG-Hermes & Citigroup for Alexandria Containers & Cargo Handling’s secondary offering
- CI Capital & Renaissance Capital for Abu Qir Fertilizers & Chemical Industries Company’s secondary offering
NI Capital, in collaboration with the lead arranger investment bank, sets clear plans and timetables for each company set to launch in the IPO program; advising selling shareholders on the best strategy and assisting in the pre-IPO phase.
What lies in store for NI Capital’s investment banking advisory arm for 2019?
NI Capital’s investment banking advisory arm will continue to source deals from both the private and public sectors, leveraging its access to public assets to provide new lucrative investment opportunities designed to spur growth in Egypt’s capital markets and increase exposure to new sectors. NI Capital acts as an independent catalyst for promoting public-private cooperation and attracting both domestic and foreign expertise to add value to its stakeholders through promote sustainable economic and social development across Egypt.
This year will see the evolvement of the IPO program with companies stake sale publicly offered and more companies lined up with tenders awarded and work progressing to collectively reach the IPO program’s vision and reach its objectives.