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Employees of Egypt's privatised Bank of Alexandria want Intesa Sanpaolo out Employees of the Bank of Alexandria are to stage a protest calling for the government to take back ownership of the bank from its Italian majority shareholder
Several employees of Egypt's Bank of Alexandria (BOA) are planning to stage a demonstration tomorrow in front of the State Council to demand annulling the sale of 80 per cent ofbank ownership rights to Intesa Sanpaolo Group and the return of ownership to the government. The employees' protest coincides with the Administrative Court reviewing a suit claiming null the bank's privatisation deal, by which it was sold to the Italian group in 2006 for around LE9.5 billion ($1.6 billion). The lawsuit claims that the deal was shadowed with corruption during the valuation process. The suit argues that the bank was undervalued as it was sold at a share price of $12 while the fair market value was $38 at the time. The suit also claims the government incurred massive losses in the portfolio cleanup process it carried out before selling the bank, costing almost the same amount as the deal, rendering it obsolete. However, the bank's website claims that the government undertook a major loan rescheduling of BOA's delinquent portfolio, which included exposure of both the public and private sector. The process is said to have recouped LE6.9 billion that would have been otherwise wasted. During the sale process, 13 international banking groups applied for BOA bid. Six were shortlisted, after which they carried out due diligence process and presented their final offers. City Group International was the deal consultant, overseeing the due diligence process and carrying out a separate valuation, which was used as a benchmark in the sale negotiation, according to the BOA website. Intesa Sanpaolo Group kept BOA's original trademark and name, as well as most of the management structure. Recently it replaced Mahmoud Abdel Latif, its chairperson and managing director during the sale, with Bruno Gamba. In 2009, Intesa Sanpaolo sold 9.75 per cent of the bank's shares to the International Finance Corporation at LE28.38 per share in a deal that amounted $200 million. The current shareholding is divided amongIntesa Sanpaolo (70.25 per cent), the Egyptian government (20 per cent) and the IFC (9.75 per cent). The equity investment is IFC's largest in Egypt and its second largest globally.
