Egypt: EFSA cite "lack of experience" in quashing QInvest-EFG Hermes tie-up
Egypt's financial regulator quashes a much anticipated deal on EFG Hermes with Qatar's QInvest, citing the latter's inexperience
Click here to add Cairo as an alert
Disable alert for Cairo,
Click here to add EFG-Hermes as an alert
Disable alert for EFG-Hermes,
Click here to add Egyptian Financial Supervisory Authority as an alert
Disable alert for Egyptian Financial Supervi ...,
Click here to add QInvest as an alert
Disable alert for QInvest
The Egyptian Financial Supervisory Authority (EFSA) has cited Qatari QInvest's lack of experience as the main reason for refusing to approve its year-old joint venture deal with Egyptian investment bank EFG-Hermes, as stated in a press release Thursday.
"In light of the limited experience of the purchasing company and its lack of activity since its inception, it does not meet the legal requirements for acquiring subsidiaries of EFG-Hermes, one of the largest investment banks in Egypt," said the regulator.
The Qatari investment bank, founded in 2007, has an authorised capital of $1 billion and paid up capital of $750 million. According to the now defunct agreement, it sought to acquire a 60 percent stake in EFG Hermes, a Cairo-based leading investment bank in the Arab world, established in 1984.
On Wednesday, a joint statement by EFG Hermes and QInvest announced the expiry of the joint venture agreement due to EFSA's failure to grant the deal a "no-objection" endorsement after regulators in "all other markets in which the joint venture was initially to operate" approved it. These included Qatar, the United Arab Emirates, Saudi Arabia and Jordan.
The Egyptian investment bank, which was dealt a blow by the revolution, badly needed the $250 million injection from the deal. It will now cut costs to LE500 million ($72.11 million) in 2014 from LE780 million for 2013, it said in a release to the Egyptian exchange
- Al Tayer bucks the US department store trend with Bloomingdale's Kuwait opening
- Gulf Islamic banks set to outperform conventional banks for second year: Moody's
- Jordan secures EU finance for socioeconomic and environmental programs
- Same-day service deliveries in GCC an untapped market: Wing CEO
- Will terror attacks damper Arabs' appetite for European holidays?