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Tuesday, 20 October 2020

EFG says no word from Egypt regulator on Qinvest deal

Investment bank says its merger with Qatari QInvest will fall through if it does not receive EFSA's approval by May 3

Reuters, Tuesday 16 Apr 2013
EFG Hermes
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EFG-Hermes, the Middle East's largest investment bank, said on Tuesday it had not received notification from Egypt's financial regulator of clearance for its merger with QInvest of Qatar.

Shares in EFG jumped 6 percent after a newspaper reported that Egyptian Prime Minister Hisham Qandil had told Qatari businessmen during a visit to Doha last Wednesday that the deal would go through by the end of this week.

An EFG spokesman told Reuters: "EFG Hermes Holding has not been informed of any development and accordingly we have published a disclosure to the EGX (Cairo stock exchange) this morning confirming that we didn't receive a 'no objection' response on the deal till date."

A spokesman for the Egyptian Financial Supervisory Authority said he had no immediate comment.

EFG told Reuters in an emailed statement later on Tuesday that, given it had not received regulatory approval to date, it may be difficult to implement the terms of the joint venture signed last May.

A clause in the agreement signed with QInvest on May 4, 2012 states that the deal will lapse after 12 months if regulatory approval is not forthcoming.

The bank also said that renewal of the deal could become unfeasible "in light of the change in the economic conditions and the increased price of the dollar, in addition to the loss of confidence in obtaining the EFSA's approval".

A spokesman for QInvest told Reuters it had no update on the status of the merger.

The deal is politically sensitive in Egypt because both of EFG's chief executives, Hassan Heikal and Yasser El Mallawany, stand accused by the authorities of illegal share dealings in relation to a 2007 transaction, along with the two sons of ousted President Hosni Mubarak.

EFG has said it would defend the two CEOs.

Egypt received a pledge of another $3 billion in financial support from Qatar during Kandil's visit. The emirate's prime minister said there were no strings attached to the aid, which will be in the form of Qatari purchases of Egyptian government bonds.

 

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