Shares in Egypt’s Qalaa Holdings, one of the country’s largest investment companies, fell by nearly 10% on Wednesday after it said that its stake in a new refining company had been reduced.
Qalaa said that it now owns 13.14% of the Egyptian Refining Company (ERC), a $4.1 billion project it co-owns with Qatar Petroleum, state-run Egyptian General Petroleum Corp (EGPC) and other partners. Qalaa previously held a 19% stake.
The company’s shares closed at 3 Egyptian pounds, down 9.9% from Tuesday’s close.
In a statement to the Egyptian stock exchange, Qalaa said its holding had been diluted over time partly because Qatar Petroleum and EGPC have underwritten additional equity for the project.
Radwa El-Swaify, head of research at Pharos Securities Brokerage, said the share price fall was attributable to Qalaa’s reduced stake in ERC combined with the effect of low oil prices on the refinery’s financial outlook.
Qalaa’s shares have suffered steep losses in recent years, sinking as low as 0.66 Egyptian pounds in October 2016.
“The stock’s recent performance has been negative, reaching the level of 3 Egyptian pounds, which may open the door to a further decline to technical support levels at 2.7-2.75 Egyptian pounds,” said Ibrahim El Nemr, analyst at Naeem Brokerage.
Qalaa Chairman Ahmed Heikal told Reuters in May that he expects revenue to exceed 90 billion Egyptian pounds ($5.45 billion) in 2020 after the refinery comes online in the third quarter of 2019. Between 50 billion and 55 billion Egyptian pounds would come from ERC, he said.
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