KEY THEMES
Two themes we see playing out in 2021 as evident in some of the news that emerged so far in the year, namely (1) mergers and acquisitions (M&A) and (2) initial public offerings (IPOs). For the former, we have three M&A news today concerning Maridive & Oil Services [MOIL] sale of one of its subsidiaries, Abu Dhabi Islamic Bank – Egypt’s [ADIB] potential sale of a small EGX-listed subsidiary Alexandria National Co. [ANFI], and Elsewedy Electric’s [SWDY] potential acquisition of a transformers manufacturer. All that remains is the official launch of one of the several IPOs that have been earmarked for 2021.
Positive
SWDY: We reiterate our positive view on SWDY which continues to, not only expand locally with new awards, but also looks to grow inorganically overseas in high-margin segments.
MOIL: Left to its own financials, we would rather stay away from the name. However, monetization of its assets as in the sale of some of its underlying businesses should help unlock some of the value in the company, especially as it looks to deleverage its balance sheet. The potential sale of Maridive Offshore Projects (MOP) should bring in some USD48mn, which is half MOIL’s market cap. Generally speaking we believe MOIL or any of its remaining subsidiaries remain acquisition targets.