The private placement of 740 million new shares in Al Dhiyafa Holding Company, a recently established Kuwaiti holding company which will acquire a valuable and diversified portfolio of prime hospitality companies and assets in Egypt, Lebanon and Kuwait against the backdrop of a booming regional tourism and hospitality industry, was launched by KIPCO Asset Management Company (KAMCO) at a price of 105 Fils per share ( including 5 Kuwaiti Fils per share as subscription fees).
Al Dhiyafa Holding Company was incorporated on 28 November 2005 with a Capital of KD 1 Million by a group of prominent Kuwait Projects Company (KIPCO) affiliated companies including United Gulf Bank, KAMCO, National Mobile Telecommunications Company, Gulf Insurance Company and United Real Estate Company. The founders appointed three board members with extensive experience in the hospitality industry with Mr. Fawzi Al Musallam as the company’s Chairman , Mr. Ghassan Al Ghawas as Vice Chairman and Mr. Mohsen Abu El Azm as a Board Member.
The outlook for the future of the hospitality industry in the region is positive. The increased liquidity and positive forecasts for economic growth in the region are also anticipated to enhance the industry and to improve the private sector’s role in the future development of the hospitality industry.
The private placement of at least 740 million new shares through a capital increase will be offered to existing shareholders as well as invited new investors. The proceeds raised of KD 74 million (approximately US$ 253 million) will be utilized by Al Dhiyafa Holding Company to acquire seven hotel and development assets from their current owners for a total KD 54 million (approximately US$ 185 million based on the independent valuations by KPMG Kuwait). The remaining amount raised will be utilized for asset development purposes and for possible future ventures currently being studied by the Company’s senior executives.
The assets held by KIPCO Group companies include 100 per cent of Gulf Egypt for Hotels & Tourism Company (owner of four major assets based in Cairo and Sharm El Sheikh: the five star Sheraton Heliopolis Hotel in Cairo, a new luxury hotel under development in Heliopolis (Cairo) and prime land for commercial and hospitality development in both Heliopolis, Cairo, and Sharm El Sheikh); 55 per cent of United Lebanese Real Estate Company (owner of a new five-star luxury hotel under development in Raouche, Beirut); 100 per cent of United Bhamdoun Real Estate Company (owner of the recently-opened four-star Safir Bhamdoun Hotel in Lebanon); and the new luxury boutique five star Marina Hotel in Kuwait (part of the Marina World development).
The private placement offering is scheduled to close on 15 February 2006 and will be by invitation only to selected investors. KAMCO anticipates that Al Dhiyafa Holding Company will be in a position to be listed on the Kuwait Stock Exchange following three years from its incorporation, subject to fulfillment of listing conditions.
KAMCO will provide a Secondary Market exit for its clients and investors by offering the opportunity to invest through a Special Purpose Vehicle (SPV) which will invest its capital in Al Dhiyafa Holding Company. Investors who invest through the SPV may trade their investment on a best efforts matched trade basis before the end of the 3-years lock-up period, subject to availability of market demand.
KAMCO Chairman Masaud M.J. Hayat said: “KAMCO is delighted to present this opportunity to its clients and select investors to invest in Al Dhiyafa Holding Company. We believe this private placement offering of shares will be of interest to regional investors, due to the company’s geographically and operationally diversified portfolio of target acquisitions, the excellent potential for future growth in earnings and value, and the attractive and growing sector in which it intends to operate. We also believe that Al Dhiyafa Holding Company will be a valuable future addition to the Kuwait Stock Exchange, offering investors access to this important industry sector.”
Terms and conditions of the private placement are contained in the Private Placement Memorandum being issued by KAMCO. KAMCO is one of Kuwait’s premier investment companies with extensive experience of corporate finance, having completed 36 transactions with an aggregate value of US$ 2 billion in the last 4.5 years.
