CAIRO: Shares in Egypt’s largest investment bank EFG Hermes rose 2.6 percent on the Egypt Exchange on Thursday after it acquired 51 percent of state-owned Arab Investment Bank (AIB), in the country’s first bank privatization in more than a decade.
The Sovereign Fund of Egypt also acquired a 25 percent stake, while the current owner, state-owned National Investment Bank (NIB), retained 24 percent, the fund and EFG Hermes said in a joint statement on Thursday.
Under the transaction, new shares were issued to raise AIB’s capital to 5 billion Egyptian pounds ($319.9 million). EFG Hermes subscribed to new shares worth 2.55 billion pounds and the sovereign fund to shares worth 1.25 billion pounds, the statement said. The deal was announced late on Wednesday.
“AIB’s strategy will focus on serving small and medium enterprises as a driver for inclusion,” the sovereign fund’s CEO Ayman Soliman said in the joint statement.
“By upgrading its technological infrastructure, the bank will be better able to serve more customers, especially after the capital increase to meet the new banking law requirements.”
The AIB transaction is the first of many to come in the near future under a cooperation protocol that the fund signed with NIB, Soliman added.
James Swanston, an analyst with Capital Economics, said the acquision was positive sign in the privatization drive that is part of the government’s wider reform plans.
“This should help to improve the local business environment and make it more attractive for foreign investors/companies to invest into Egypt’s economy, but there are many more issues that need to be tackled to unlock faster productivity growth,” he said.
NIB was established in 1980 to finance government projects. Egypt last year told the International Monetary Fund it would restructure NIB’s balance sheet through sales and swaps of assets, land or shares in public companies to settle overdue debts.
EFG Hermes shares climb after it acquires Arab Investment Bank majority stake
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EFG Hermes shares climb after it acquires Arab Investment Bank majority stake
- Under the transaction, new shares were issued to raise AIB’s capital to 5 billion Egyptian pounds
India seals $3bn LNG agreement with UAE
- Leaders hold talks to strengthen trade, defense ties
NEW DELHI, DUBAI: India signed a $3 billion deal on Monday to buy liquefied natural gas from the UAE, making it the Gulf country’s top customer, as the leaders of both countries held talks to strengthen trade and defense ties.
The agreement was signed during a very brief two-hour visit to India by UAE President Sheikh Mohammed bin Zayed Al-Nahyan for talks with Indian Prime Minister Narendra Modi.
They pledged to double bilateral trade to $200 billion in six years and form a strategic defense partnership.
Abu Dhabi state firm ADNOC Gas will supply 0.5 million tonnes of LNG a year to India’s Hindustan Petroleum Corp. for 10 years, the companies said.
ADNOC Gas said the agreement brings the total value of its contracts with India to over $20 billion.
“India is now the UAE’s largest customer and a very important part of ADNOC Gas’ LNG strategy,” the company said.
The UAE is India’s third largest trading partner and Sheikh Mohammed was accompanied by a government delegation that included his defense and foreign ministers. The two sides signed a letter of intent to work toward forming a strategic defense partnership, India’s Foreign Secretary Vikram Misri told reporters.
Misri, however, said that the signing of the letter of intent with the UAE does not mean that India will get involved in regional conflicts.
“Our involvement on the defense and security front with a country from the region does not necessarily lead to the conclusion that we will get involved in particular ways in the conflicts of the region,” he said.
