MNT-Halan to sell 20% stake in Egyptian stock market IPO

MNT-Halan, the Egyptian lending and payments company founded by Mounir Nakhla, plans to sell a 20% stake in its Egyptian business through an initial public offering on the Egyptian Exchange, in what is expected to be one of the country’s largest share sales in years.

The company’s local arm, MNT Tech Holding for Financial Investments, said on Thursday that its parent will sell 320 million shares to institutional and retail investors. All of the shares on offer are existing shares held by the parent company, MNT Investments B.V., and will give the listed company a 20% free float out of 1.6 billion shares.

The company did not give a price range. The offer price will be set based on investor demand. When MNT-Halan’s bankers began testing the market in June, they pitched investors on a valuation of as much as $1 billion for the Egyptian business alone.

MNT-Halan is seeking approval from Egypt’s Financial Regulatory Authority and the stock exchange and expects to complete the offering in October, subject to market conditions. Its shares will trade under the ticker HALN.CA.

Fresh money from the parent

Because the IPO sells only existing shares, none of the proceeds will go to the listed company. Instead, after the offering, the parent will subscribe to a capital increase of up to 4 billion Egyptian pounds in new shares at the IPO price, so the new capital will come from MNT-Halan’s owners rather than public investors. The parent will also sell 24.3 million shares to senior managers before trading starts.

“We are confident in the continued development of Egypt’s capital markets, and we hope more companies are encouraged to tap the Egyptian market and help draw further foreign capital into the country,” Nakhla, the company’s founder and chief executive officer, said in the announcement.

EFG Hermes and Citigroup are joint global coordinators and bookrunners on the deal.

Only the Egyptian business is listing

The listing covers only MNT-Halan’s operations in Egypt. The wider group also owns businesses in Pakistan, Turkey and the United Arab Emirates, and those will stay private.

The group reached a valuation of $1.4 billion in June, when it raised money in a round led by Al Ahly Capital, the investment arm of the state-owned National Bank of Egypt. It was the first time a commercial bank had taken an equity stake in the company. MNT-Halan first became a unicorn in 2023, when the UAE-based investment firm Chimera bought a stake of more than 20% for $200 million.

MNT-Halan has grown into one of Egypt’s biggest lenders outside the banking system. It holds 24.3% of the country’s non-bank microfinance market by loan book and 14% of non-bank consumer finance by annual disbursements, according to the company. It also says it is Egypt’s largest non-bank lender to small businesses. Since its launch, the group has disbursed more than $15.5 billion in financing and serves over 8 million customers.

A test for Egypt’s stock market

The offering is being closely watched as a test of foreign appetite for Egyptian stocks. Foreign investors have been net sellers on the Egyptian Exchange all year, even as the benchmark EGX30 index has risen 26.8% since January. Bankers hope strong international demand for MNT-Halan will draw foreign money back into the market and help other companies waiting to list, including Banque du Caire and Misr Life Insurance.

The company says its growth plan has five parts: expanding its range of products, selling more products to existing customers, increasing loan disbursements, using its own technology and artificial intelligence to cut costs, and improving its capital structure.

The listing also comes as Egyptian regulators tighten oversight of consumer lending. The Central Bank of Egypt and the Financial Regulatory Authority have introduced stricter rules on credit reporting, debt collection and borrower protection after a surge in non-bank lending raised concerns about over-indebtedness.

Anyone holding at least 10% of the company at the time of listing will have to keep 51% of that stake for at least two financial years under the exchange’s rules.