(DNE Photo)
A final decision on the partnership deal between EFG Hermes and Qatar-based investment bank QInvest is likely be finalised before 3 May, the deadline for concluding the deal, stated Minister of Investment Ossama Saleh.
Saleh said in a press conference held on Saturday in Suez that “some of the papers are being reviewed and the final decision will come before 3 May”, adding that an announcement will be made during that period declaring whether the deal is completed or not.
EFG Hermes said in a press release on 7 April, however, that it will be hard to implement the merger if it does not get the approval of the Egyptian Financial Supervisory Authority (EFSA) before 3 May, as the deadline for ratification falls on this day. He mentioned that the deal with QInvest will inject $300m into the Egyptian economy.
A clause in the agreement signed with QInvest on 4 May 2012 stipulates that the transaction is to be cancelled after 12 months if it does not receive regulatory approval.
Last June, EFG Hermes shareholders approved entering into a strategic partnership with QInvest for the establishment of a regional investment bank covering the Arab world, Africa, Turkey, and Southeast Asia.
Under that agreement QInvest will control 60% of the new bank, which will be renamed EFG Hermes Qatar, and will provide $250m to increase its capital.
EFG Hermes said last week that the renewal of the agreement with QInvest may become futile in the light of changes in economic conditions and the rise of the US dollar, in addition to the loss of confidence in obtaining EFSA approval.
Ashraf Al-Sharqawy, the head of EFSA, said in early April that the deal documentss are still incomplete, but Hermes said in a statement that it is waiting to obtain “letters from the authorities” allowing it to merge with QInvest after answering EFSA’s comments.
EFG Hermes’ stock reached a five-month low last week, triggered by uncertainty surrounding the deal.
Hermes operates brokerage, advisory, asset management and private equity subsidiaries, in addition to owning a controlling stake in Beirut-based retail bank Credit Libanais.
