Cairo – Mubasher: The ordinary general meeting (OGM) of the Egyptian Iron and Steel (Hadisolb) approved the disposal of several land plots to settle debts owed to Metallurgical Industries Holding Co and Banque Misr, and part of the debt owed to Petrotrade.
The company will continue its operations over the land plots that are passed on to the Metallurgical Industries Holding Co without any consideration, according to the Egyptian Exchange (EGX) on Wednesday.
In a separate statement, the company said that its shareholders approved the liquidation of its steel plant and spin-off of its mining operations.
The liquidation will be based on the company’s financial position as of 31 December 2020.
The reason for liquidation is the rising incurred losses of the company which reached EGP 8.2 billion as of 30 June 2020, representing 547% of the shareholders’ rights as well as its inability to meet its commitments, including the wages of employees and production requirements.
The shareholders also approved the horizontal demerger of the company based on the book value of the stock as of 30 June 2020.
The move will see Hadisolb spin off its mining business to create the Egyptian Iron and Steel for Mining and Quarrying which will have an authorised capital of EGP 500 million and an issued capital of EGP 195 million, while Hadisolb’s authorised capital will stand at EGP 2 billion and its issued capital at EGP 1.758 billion.
Hadisolb expects receiving the Financial Regulatory Authority’s (FRA) approval to issue the shares of the spinoff company in two to three weeks as of the date of the extraordinary general meeting (EGM).
The liquidation process is expected to be complete in one and half to two years, while the new spinoff company is expected to be listed in the commercial register within seven to 10 days as of the date of the issuance of the company’s shares.
Following the announcement, the EGX resumed trading on the company’s stock after being suspended on Tuesday.
During the first quarter (Q1) of fiscal year 2020/2021, Hadisolb incurred net losses of EGP 274.48 million, down from EGP 367.8 million in the year-ago period.