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Egypt's Qalaa Holdings seeks exit from small loan firm Tanmeyah

Qalaa Holdings Chairman Ahmed Heikal is seen at Qalaa's section at the Egypt Economic Development Conference (EEDC) in Sharm el-Sheikh, in the South Sinai governorate, south of Cairo, March 14, 2015. REUTERS/Amr Abdallah Dalsh

DUBAI (Reuters) - Qalaa Holdings, one of Egypt's largest investment firms, is considering the sale of its 70 percent stake in Tanmeyah, which provides small loans to low-income people who cannot otherwise access financial services. Divesting a controlling stake in the North African country's biggest private microfinance provider is part of a wider asset sale plan by Qalaa, which aims to raise $300 million to help the company return to profit this year. Qalaa has hired CI Capital, the investment banking arm of Commercial International Bank, to study options for the sale of its Tanmeyah stake, it said in Tuesday's statement. "The exit from Tanmeyah, if concluded, would provide us with liquidity that exceeds the needs of both our current deleveraging programme and our financing needs and permits share buybacks by Qalaa Holdings on an opportunistic basis,” said Ahmed Heikal, Qalaa Holdings’ chairman and founder. Heikal said Qalaa may sell other assets to fund share buybacks, given the stock was trading at a steep discount to its fair market value. Qalaa said it was progressing with negotiations to sell its stakes in dairy producer Dina Farms, confectioner Rashidi El-Mizan and Misr Glass Manufacturing. It added that it was in advanced talks to sell SEC Cement Algeria, and is discussing a deal to sell its stake in Zahana Cement Company to its Algerian partners.