ADQ Wealth Fund secures 40.5% stake in ICON Hospitality

ADQ acquires ICON: Abu Dhabi's ADQ wealth fund has recently entered into an agreement to acquire a 40.5 per cent interest in ICON, the hospitality division of Egypt's Talaat Moustafa Group (TMG). This move will result in ADQ becoming a partial owner of several upscale hotels in Egypt. The deal involves the creation of a special purpose vehicle, jointly owned by ADQ and its subsidiary ADNEC, holding 49 per cent and 51 per cent, respectively. Through a capital increase, this entity will secure the ICON stake.

In a statement released on Friday, ADQ highlighted the importance of this transaction as a substantial foreign direct investment in Egypt. Unfortunately, specific financial details of the deal were not disclosed.

The agreement encompasses the acquisition of a share in seven heritage hotels, including Four Seasons properties in Cairo, Sharm El Sheikh, and Alexandria, as well as the Kempinski Nile Hotel in Cairo. Presently owned by the Egyptian government through ICON, these establishments were part of a broader $800 million deal signed in December. Egypt's prime minister revealed that the country's sovereign wealth fund had agreed to sell a 39 per cent stake in these hotels to TMG, with the option to increase the share to 51 per cent.

International investor would acquire a minority stake worth $882.5 million in ICON under this arrangement. Political ties between the UAE and Egypt are robust, with the Gulf state consistently supporting Cairo during financial challenges through direct capital injections and investments.

In 2022, ADQ made investments of approximately $1.85 billion in Egyptian companies. Last year, Cairo also agreed to sell minority stakes in three oil and petrochemical sector companies to ADQ for $800 million. As part of its strategy to boost the private sector, accumulate foreign currency reserves, and implement economic reforms under a $3 billion IMF loan programme, Egypt continues to sell assets.

(With Reuters Inputs)