Egypt’s Prime Minister Hisham Kandil, vowed Hermes-QInvest takeover deal’s completion procedures before the end of this week.
The Prime Minister said, in a reply to a question from a number of Qatari businessmen during his visit to Doha last Wednesday, the EFG-Hermes (HRHO.CA)’s strategic alliance with Qatari QInvest will come into effect within the week at most.
On April 7th, EFG-Hermes noted in a release that it was still waiting for approval from Egyptian regulators for a deal with Qatari investment company QInvest, which lapses on May 3 unless cleared by then.
EFG also stated that it had received regulatory approval in various countries for the deal, under which it would initially inject its core business into a joint venture 60 percent controlled by QInvest.
“If EFG does not receive a ‘no objection’ from the (Egyptian Financial Supervisory) Authority in the coming days, it will be difficult to implement the joint venture agreement,” the Egyptian company said.
QInvest, a unit of Qatar Islamic Bank (QIBK), and EFG-Hermes plan to create an investment bank with operations in the Middle East, Africa and Turkey, as well as southern and southeastern Asia. The takeover would include EFG’s main investment-banking, asset- management and brokerage businesses, and exclude its private- equity business and Credit Libanais SAL unit.
As pursuant to the strategic alliance, QInvest will invest $250 million in the venture and take a majority stake in the new company, which will include EFG’s main investment-banking, asset-management and brokerage businesses. It will exclude EFG-Hermes’s private-equity business and Credit Libanais SAL unit. The Qatari company also has an option to buy total ownership of the venture.
The deal means QInvest will control 60 per cent of the new bank, which will be called EFG-Hermes Qatar, and will pour in $250 million to increase its capital.
EFG-Hermes’s co-chief executives, Yasser Al Mallawany and Hassan Heikal, are also defendants alongside former Egyptian president Hosni Mubarak’s two sons, Alaa and Gamal Mubarak, and five others on charges of illicit gains related to the 2007 sale of El Watany Bank of Egypt. The trial began in July 2012.
“I don’t think the deal will go through before the lawsuit is finalized,” Hany Genena, head of research at Cairo-based Pharos Securities Brokerage, said yesterday by telephone. “It is not clear when the lawsuit will end.”
