The Arab Cotton Ginning Company (ACGC) is divesting its prime real estate holdings to be separately managed from its cotton production operation through offering its land for new housing and commercial development.
Post the split, ACGC will focus on the company’s cotton ginning and related industrial operations while the new company will focus on real estate investments, which ACGC believes offer attractive opportunities for housing, tourism, and commercial development.
Dr. Hani Olama, Chairman of ACGC said the new strategy will cover the sale of land as well as developing residential, commercial, managerial and touristic projects through partnerships with well-established real estate developers.
ACGC controls a land bank in excess of 600,000 m2 distributed over 13 prime locations with scarce land across Egypt. The land was traditionally utilized to house gins that are currently being moved to new less costly industrial zones situated further away from residential areas. 6 gins have already been moved to new locations. This offers ACGC the opportunity to reap the value of the locations.
ACGC announced at an extraordinary general meeting it would re-acquire the real estate investment company through a share swap to guarantee shareholder rights in the holding company, once the legal proceedings of the split are completed. Dr. Olama said the split is primarily designed to help restructure the company to maximize shareholder benefits relating to the revaluation of assets.
Dr. Olama stressed that the transaction comes in a series of restructuring steps ACGC is undertaking towards transforming into a specialized holding company. He said the transaction will take 3-4 months to complete.