Egypt’s Commercial International Bank has announced that it will not seek to renew an agreement with Beltone Financial Holding on the sale of CIB’s shares in its investment arm to Beltone, due to the failure of the buyer to obtain the necessary approvals.

“In reference to the Bank’s release dated May 26th, 2016 in which it was disclosed that CIB and Beltone Financial Holding (“Beltone”) have extended the validity of the Share Purchase Agreement (SPA) pertaining to the sale of the Bank’s shares in CI Capital Holding (“CI Capital”) to expire on June 9th, CIB would like to announce that it will not further extend the validity of the SPA,” the country's largest private lender said in a statement on Thursday.

Beltone, the purchasing entity for the acquisition of CI Capital on behalf of Orascom Telecom and Media Technology (OTMT), first signed the EGP 924 million deal with CIB in February. The deal has since faced a series of delays.

At the time, OTMT chairman Naguib Sawiris said he planned to merge CI Capital and Beltone Financial, which OTMT acquired late last year, to create one of Egypt’s largest investment firms.

Egypt’s financial regulator, the Egyptian Financial Supervisory Authority, said this month that the deal was delayed pending the resolution of a court case and other issues, including a violation by Sawiris of pre-existing pledges to the EFSA.

Sawiris's bid for CI Capital was also challenged in February when a unit of the state-owned National Bank of Egypt made a counter-offer, which it later withdrew on the basis of not having the time to conduct due diligence.

Beltone released a statement on Thursday expressing its desire to "re-open the case of the deal as soon as obstacles preventing it are cleared," citing its “faith in the strength of the entity created by such a merger,” the firm said in a statement.

The acquisition would give a single investor, Naguib Sawiris's OTMT, control over nearly a quarter of daily market turnover through the brokerage arms, and over EGP 40 billion in assets under management through the Beltone and CI Capital asset management arms, Wafik Dawood, portfolio manager at Compass Capital, told Ahram Online.

Egyptian law does not currently prohibit the creation of such a large entity, says Dawood.

In a critical column published by Al-Akhbar newspaper in March, Sawiris said the deal was being held up by national security concerns and criticised the state for meddling in business, adding that it discouraged investors. 

He accused the central bank of instructing local banks to pull out of financing the acquisition after expressing their earlier approval.

In a televised interview a day earlier, the governor of the central bank, Tarek Amer, said that it would be risky for banks to finance acquisitions by investors with no track record in the sector they are buying into, adding that industry outsiders do not add value to the sector.

"We will not block acquisitions, but require investors to bring in their own money," said Amer.