The multiple-staged transaction of full acquisition and financial restructuring (equity and debt) has been in process for the past 13 months consisting of three consecutive transactions.
The first one was the full acquisition of the previously distressed asset in North Coast “White Bay”. For this transaction, Zilla Capital acted as the exclusive sell side advisor for the major shareholder Eng. Moaz Wessam, that was successfully concluded by SQM – a subsidiary development company of Eng. Shehab Mazhar in partnership with Eng. Hesham Abu Seif.
The second one was the financial restructuring of the newly acquired project as part of a bigger turnaround mandate, whereas Zilla Capital acted as the exclusive advisor for SQM for equity raise that was concluded by onboarding a new investor that is one of the top contractors in the market: Concrete Plus (owned by Eng. Tarek Youssef and Eng. Houssam Fekry) for a minority stake of 25% in the project.
The third one was the financial restructuring through debt financing whereas Zilla Capital acted as the exclusive advisor for SQM for a long-term financial leasing facility for the project consisting of multiple tranches that has been concluded with Corplease. The facility has been directed towards fully settling an old facility for the Arab Investment Bank, as well as financing the project completion post the turnaround and key investment components of the project.
Historically, the project was planned as a high-end mixed-used summer resort located in a premium location in the heart of the New North Coast, in one of the top notch and untouched areas; Sidi Hineish Bay. The project was created with a vision to build a fully luxurious summer resort with residential units that vary in type from villas to studio apartments, as well as a hotel. The project features various prime facilities, featuring but not limited to 400 meters beach shoreline, lagoon and swimming pools.
Pre-turnaround – the resort was developed on a land area of 70 feddans. After the successful launch of the project back in 2015 and the promising level of the sales, the project was hardly hit by the devaluation impact affecting the cash flow and posing a significant squeeze on the company and its shareholders, along with several internal financial and management challenges that posed a burden on the shareholders in 2020 and the resort was thus considered a distressed asset with considerable liabilities to different stakeholders including clients, financial institutions and contractors.
SQM – the buyer company with the renowned experience of all its shareholders was able to identify the potential upside of acquiring the resort building on the potential synergy as an extension to the group’s neighboring most recent development Sidi Heneish Village, having both as two separate gated projects adding to the diversity of the group portfolio by providing different product types catered for different market segments.
Marsa Bagush’s land area post the turnaround has expanded to 338 feddans, which highly boosted the potential of the project and the scalability to a luxurious top-notch development.
The current shareholders structure of SQM consists of Eng. Shehab Mazhar as the major shareholder while both Eng. Hesham Abu Seif and Concrete Plus are minority shareholders. Eng. Hesham also has a top management and executive role closely in charge of spearheading the project launch and sustainability.
Worth noting that a consortium led by Concrete Plus and including Asass Construction has been assigned the full contracting scope of Marsa Bagush that will start the construction works in April 2022 with a clear plan to expedite the delivery of the delayed sales as well timely delivery of the new sales. The consortium led by Concrete Plus is also providing the project with the needed contracting financing in the first two years to guarantee resilient cash flows and the ultimate success of the turnaround.
Matouk Bassiony & Hennawy (MBH) acted as the legal advisor for SQM across all phases of the transaction.
Khodeir & Partners acted as the legal advisor for Concrete Plus on the equity transaction.
BDO Consulting has performed the full due diligence scope for SQM as part of the acquisition transaction.
Zilla Capital is proud to be the mastermind for this transaction throughout its different stages that started since the structuring of the distressed company to be turned into a transactable asset, going through the later phases of capital restructuring, and mapping the different components of the turnaround with the new shareholders of SQM as part of promoting the turnaround success paving the way for equity and debt raise and ensuring a sustainable capital structure and a whole new market positioning for the rebranded asset Marsa Bagush. Zilla Capital and its team are pleased to continue being the exclusive financial advisor for SQM on the remaining activities of this project and the future ones.
This mandate was led by Moustafa El-Shenety – Managing Partner and Head of Investment Banking, Ola Ismail – Assistant Vice President, Abdelfatah Abomousa – Assistant Vice President, and Mohamed Tolba – Associate.
Commenting on this multi-dimensional transaction, Moustafa El-Shenety – the head of Investment Banking practice at Zilla said:
And proving the successful packaging for the acquisition, Eng. Moaz Wessam – the major shareholder pre-acquisition said:
eing the current major shareholder, Eng. Shehab Mazhar commented:
And in order to sustain the project scalability, Eng. Hesham Abu Seif commented:
Eng. Tarek Yousef leading Concrete Plus as the equity investor and main project contractor commented:
Having Corplease as the financing institution involved in the project assessment for long term financing, Mr. Tarek Azmy commented:
On legally structuring the different aspects of the multi-staged transaction with multiple stakeholders, the transaction legal advisors had their input whereas Tamer Hennawy said:
While Mohamed Khodeir said:
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About:
Shehab Mazhar:
Shehab A. Mazhar Architects is a multi-dimensional architecture, design & consultancy and development firm offering distinctive services, tailored to the needs of its clients.
Shehab A. Mazhar, is a prominent architect who has been at the forefront of architecture and design in Egypt since establishing his firm in 1978.
Eng. Shehab Mazhar is the mastermind behind various landmark projects in Egypt such as: the renovation of El-Tahrir Square, the master planning of El Gouna and Hacienda Red, Architecture of Palm Hills compound in October and the development of Sidi Hinish Village in the North Coast, among many other notable projects.
Concrete Plus:
Established in 1998: Concrete Plus has played a crucial role in the development of major construction projects in our country.
Backed with their extensive previous experience as executives in leading construction companies; Eng. Tarek Youssef and Eng. Hossam Fikry had a vision to build the future.
Zilla Capital:
Zilla Capital is a leading Investment Bank that provides clients and partners with strategic advice within several structural and operational domains. We leverage our Executive Partners’ extensive experience and network in the region to help our clients conduct business in Egypt, the MENA Region, and Africa. We assist our clients in achieving their strategic goals by offering comprehensive and integrated financial solutions that cater to their specialized needs.
Zilla Capital is a one-stop-shop for all financing and investment needs, offering an array of services including financial advisory, asset management, private equity, non-banking financing solutions, and management consulting.
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Zilla Capital Press Contacts:
Moustafa El Shenety
Managing Partner – Head of Investment Banking
moustafa.shenety@zillacapital.com
Abdelfatah Abomousa
Assistant Vice President
abdelfatah.abomousa@zillacapital.com
Ola Ismail
Assistant Vice President
Mohamed Tolba
Associate