Egypt’s South Valley Cement said on Sunday its board had approved a plan to increase its capital to E£2.2bn (US$398.6 m) from E£1.48bn to finance expansion.  
 
Tamer Abdel Rahman, the firm’s investor relations director, said existing shareholders could buy one share for every two they already own at a par value of 5 pounds per share.  
 
"The company intends to finance the completion of the cement factory in Beni Suef," he said. South Valley is building a cement factory in Beni Suef with a production capacity of 1.5Mta. Production will begin in March 2008.  
 
The firm acquired a licence for the factory in October and is waiting for final fee arrangements, which will be paid in instalments. The fee is expected to be around E£251m.  
 
The company’s board also decided to borrow an extra US$82m from banks to cover extra expenses from the licence, a company statement said. The firm had already borrowed US$130m from banks to finance the factory.  
 
Abdel Rahman said the capital increase would also be used to finance South Valley’s joint venture with Egypt Kuwait Holding .  
 
South Valley, Egypt’s second biggest listed cement company by market value, said in October it would form a joint venture with Egypt Kuwait Holding, among others, to establish a new cement company with a capital of 600 million pounds. South Valley would hold 46 percent stake.  
 
The new joint venture would establish a cement factory in Assiut following Egypt Kuwait Holding’s acquisition of a licence to establish a plant there.