Egypt's Qalaa Holdings, formerly Citadel Capital, has finalized its equity capital increase to a total of $1.27bn from $1.05bn.

Proposed capital increase of $222.4m is the the final for the transformation process begun in late 2013 that saw the company convert its business model from a private equity to investment company.

Ahmed Heikal, Chairman and Founder of Qalaa Holdings, said: “With Egypt now on track for an economic recovery, the time is right to complete our transformation through the acquisition of additional stakes in the subsidiaries and business units that are best positioned to benefit from the upturn.”

“This will hasten our return to profitability during 2015, one year earlier than originally anticipated, and will open the way for dividend distribution in the coming years,” he said.

The proposed rights issue will see Qalaa Holdings issue up to an additional 340 million shares, of which 255 million would be common shares and 85 million preferred shares, bringing the total number of outstanding shares to 1.94 billion, of which 1.455 billion would be common and 485 million preferred.

The capital increase will be primarily funded through the capitalization of liabilities arising from the purchase of additional shares in core subsidiaries, particularly in energy and cement, from limited partners and co-investors.

Hisham El- Khazindar, MD and Co Founder of Qalaa Holdings, said that recapitalization of the business would allow the investment company to secure additional ownership in its core subsidiaries at attractive valuations, maximizing earnings over the medium and long term, while divesting out of selected assets.

“On the divestiture front, we are pushing forward with the disposal of selected assets. Liquidity generated from exit of these investments at the right time and right valuations will allow us to accelerate our deleveraging and de-risking, further strengthening Qalaa’s financial position,” he added.

The 2015 rights issue is a smaller, final version of the capital increase that Qalaa executed in 2014, which saw paid-in capital rise by close to $500m to total $1.05bn.

This allowed it to take majority stakes in most of its core industry subsidiaries including in the energy, cement, agri-foods, transportation and logistics sectors.

As part of the firm's efforts to shed non-core assets, it exited its full majority stake in Bank of Sudan for $21m, and sold Sphinx Glass to Saudi Arabia’s Construction Products Holding Company for $114m.

Qalaa Holdings has recently announced its intention to exit its remaining food businesses in Egypt - Rashidi El-Mizan and Dina Farms.