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Al-Ahram Weekly 13 - 19 January 2000 Issue No. 464 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 13 - 19 January 2000 Issue No. 464
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Heritage Special Books Profile Travel Sports People Time Out Chronicles Cartoons Letters Cairo merger
FOLLOWING a year of negotiations, EFG-Hermes and Citicorp International Finance Corporation, an affiliate of Citibank, are soon to become partners. The deal, valued at $40 million, involves Citicorp's acquisition of 20 per cent of the shares of EFG-Hermes.According to Shayne Elliott, head of Citibank Egypt and corporate country officer for Citicorp, Citibank's investment in EFG-Hermes comes within the framework of the company's efforts to help "establish Cairo as a leading financial capital of the region".
Elliott said that the "investment in EFG-Hermes will be mutually beneficial". The additional capital will be used by EFG-Hermes to "continue the expansion of our activities in Egypt and the region," said EFG-Hermes Chairman Mohamed Taymour. He added that the partnership would enable his company to "draw, as needed, on the products and assistance of its (Citicorp's) member businesses".
The deal will be implemented in two stages: the first will be Citicorp's subscription in a $30 million capital increase in EFG-Hermes' equity, while the remaining part will be covered in the international market as Citicorp will buy $10 million worth of EFG's global depository receipts (GDR) at $14.5 each. According to the terms of the deal, Citicorp has the right to increase its stake in the company to 24 per cent within three years through an additional increase in capital.
EFG's capital comprises 5.9 million shares, 41 per cent of which are being traded on the London Stock Exchange in the form of GDRs. The remaining shares are privately owned.
Once the deal is completed in March, it will boost the market value of the group to $200 million. This will make it the largest local investment bank in terms of market capitalisation and total shareholders rights.
The deal is expected to be finalised this month following the approval of the extraordinary general assembly of EFG-Hermes.
Phone deal
TELECOM Egypt (TE) has recently sold a 90 per cent stake in the Egyptian Telephone Company (ETC) to two anchor investors, an Egyptian and a Jordanian. The remaining 10 per cent of the shares will be sold to employees. Additionally, the companies signed a protocol in which TE agreed to purchase ETC products for five years.This is the second company in which Telecom Egypt, formerly Egypt's National Telecommunications Authority, has relinquished the bulk of its stake. The first, Egyptian German Telecommunications Industry, was sold a year ago. Today, 76 per cent of the company's shares are owned by Siemens, which originally bought only a 29 per cent stake from TE. The remaining shares are owned by a couple of banks, an insurance company and 10 per cent is still held by TE.
Islamic fund
COMMERZBANK, one of the big three German banks, is to launch a new Islamic fund. Commerzbank's Asset Management Group will launch Al-Sukoor European Equity Fund, one of the first European equity funds managed in accordance with Shari'a and under established Islamic investment standards. The fund is due to be offered by Commerz International Capital Management (CICM) in January, 2000.Commerzbank has identified Islamic investments as one of the fastest growing markets. It is ranked third in league tables for loans to the Middle East and Gulf regions with $3.4 billion worth of transactions so far this year.
Stock selection will be made according to restrictions provided by the fund's Board in order to eliminate unacceptable investments in companies producing tobacco or alcoholic beverages.
Flat hunting
LOOKING for an apartment? You need no longer roam the streets or flip through the classified ads; just log on to the Internet. A new website now provides a real estate database on different projects in Egypt as well as a range of other services.Visitors to the site can specify their property criteria and they will be supplied with details of all the properties on the database matching their requirements. Moreover, individuals wanting to advertise their property may do so free of charge. The site, which can be accessed at: http://www.realestateegypt.net, also includes analyses of the market and hints of where investors might direct their attention.
