Abu Dhabi wealth fund ADQ signs deal for stake in Egypt luxury hotels

Industry:    12 months ago

Abu Dhabi wealth fund ADQ has agreed to acquire a 40.5% stake in ICON, the hospitality arm of Egypt’s Talaat Moustafa Group (TMG), the fund said on Friday, a deal that will see it take part ownership of a number of luxury hotels in the country.

Under the deal, a special purpose vehicle owned by ADQ and its unit ADNEC, with respective 49% and 51% holdings, will carry out a capital increase to acquire the ICON stake.

“The transaction represents a major foreign direct investment in Egypt and marks a strong vote of investor confidence in the Egyptian tourism and hospitality sector,” ADQ said in a statement, which did not provide financial details of the transaction.

The deal includes the acquisition of a stake in seven iconic heritage hotels – including Four Seasons properties in Cairo, Sharm El Sheikh and Alexandria, and the Kempinski Nile Hotel in Cairo – currently owned by the Egyptian government through ICON.

Egypt’s prime minister said in December that the country’s sovereign wealth fund had signed an $800 million deal to sell a 39% stake in the seven hotels to TMG, with the right to raise the share to 51%.

It was understood that under the deal, an international investor would buy a minority $882.5 million stake in ICON.

Political ties between the UAE and Egypt are strong with the Gulf state supporting Cairo through a financial crisis with direct capital injections and investments, lately preferring the latter for the potential returns on offer.

ADQ bought stakes worth around $1.85 billion in Egyptian firms in 2022, and Cairo last year agreed to sell minority stakes in three oil and petrochemical sector companies to the fund for $800 million.

Egypt is selling assets to boost the private sector, raise scarce hard currency and launch economic reforms under a $3 billion IMF loan programme.

print
Source: