CIRA turns to private funding

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As Egypt’s middle class grows over the coming years, so too will the demand for high-quality private education at affordable prices, and that is something in which Cairo for Investment and Real Estate Development (CIRA) has specialized for over two decades.

Established in 1993, CIRA is the largest integrated provider of educational services in the Egyptian private sector. On the back of its reputation for quality educational services coupled with growing market demand, the company has witnessed steadfast growth year on year. Today it has around 24,000 students enrolled in its 19 schools across Egypt, which offer multiple education tracks, including British, American, French, German and National curricula.

Leveraging on its reputed track record for managing K-12 educational institutions, CIRA took the step into the higher education segment with the opening of Badr University in 2014. Reaching underpenetrated governorates such as Ismailia, Suez, and the Delta, BU’s student body has grown 67 percent year on year since it opened, and today has 7,700 students across its nine faculties.

“We’re meeting a market of 20 million people. The Egyptian middle class is larger than three or four Arab countries combined. We create excellence, in terms of what we do and we’ve always been shaking up the system. We’re the first entity to provide blended learning to the masses in Egypt – the first entity that provided the middle and lower-middle classes with specialized services,” says Mohamed El-Kalla, managing director of CIRA.

“We moved from Cairo and we went to the governorates, so we’re in Minya, we’re in Asyut, we’re in Hurghada, we’re in Suez, we’re opening in Delta… We’re seeing where Egypt is growing and we’re always there. We opened schools in new cities before people started moving in, making us part of the story of why they move, because the school is there.”

CIRA’s growth has been supported through access to international funds from the International Finance Corporation, amongst others. But in order to fund further growth and to achieve its future objectives, the company announced in August it would offer nearly 207.3 million shares, representing around 37.84 percent of CIRA’s share capital, for sale in a public offering on the Egyptian Exchange. In September, the offering, which included an institutional and retail tranche, was 10.9 times oversubscribed – clear evidence of the huge investor interest in CIRA and the growing market to which it caters.

“Everybody was holding onto their IPOs while we pushed full throttle, because at the end of the day we came to the market with a real story and a real business perspective,” explains Mr. El-Kalla. “The stock jumped 18 percent on the first day of trading and has been quite stable since then. There is huge interest coming out of London and the U.S.”

“Listing on the Egyptian Exchange opens up access to a much larger pool of investors and wider spectrum of funds from the West. This in turn opens up opportunities in terms of partnerships, access to other models around the world and stability of the company going forward,” explains. Mr. El-Kalla.

“We’re looking for longer term investors. In general, education-healthcare businesses are long-term investments and usually you see that more in the West. So, going to the stock market to tap well-established, medium- to long-term investors made perfect sense.”

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