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Wednesday, 04 August 2021

Egypt's cabinet approves acquisition of Arab Investment Bank by EFG Hermes, TSFE

TSFE has said the partnership with EFG Hermes comes under the fund’s plan that aims at cooperating with the private sector to invest in promising sectors

Ahram Online , Ahram Online , Wednesday 19 May 2021
Egypt
Egypt's EFG Hermes (Photo: A-Ahram)
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The Egyptian cabinet approved on Wednesday the pending acquisition deal of the state-owned Arab Investment Bank (AIB) by EFG Hermes, an investment corporation, and the Sovereign Fund of Egypt (TSFE).

EFG Hermes will possess a 51 percent stake in the AIB, and the TSFE will own 25 percent, while the remainder of the shares (24 percent) will be retained by the AIB's current shareholders, which include the National Investment Bank (NIB) and the Federal Arab Republics.

Under the deal, the AIB's capital will be increased by EGP 5 billion (nearly $319 million), the cabinet said in a statement on Wednesday.

The deal is still pending the regulatory authorities’ approval, mainly the Central Bank of Egypt (CBE), the cabinet added.

In June, the CBE board approved the starting of the due diligence inspection process of the acquisition request.

The AIB was established in 1974 as a commercial and investment bank under the supervision of the CBE. It started operation in 1978 with a capital of EGP 627 million, which was increased to EGP 1.8 billion, with participation of 91.4 percent from the NIB and 8.5 percent from the Federal Arab Republics.

CEO of the TSFE Ayman Soliman has said that the partnership with EFG Hermes comes under the fund’s plan that aims at cooperating with the private sector to invest in promising sectors, especially the banking and digital transformation sectors.

CEO of EFG Hermes Karim Awad said his company adopts a strategy that aims to turn the AIB into a universal bank that can provide all banking and non-banking services.

Established in 2018, the TSFE aims to attract private investments to Egypt as well as promote and co-invest in untapped state-owned assets to maximise their value and efficiency and to create jobs, with EGP 200 billion as capital.

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