Yasser El Mallawany, Chief Executive Officer of EFG Hermes, announced on Wednesday the firm is finalizing the tie-up with Qatari QInvest within the coming two months. Pursuant to the agreement, EFG Hermes and QInvest shall enter into an alliance where 60% will be owned by QInvest and 40% owned by EFG-Hermes holding. The JV Company shall be the entity holding the Business post-closing. El Mallawany has attributed the delay in concluding the takeover deal to the unstable situation of the Egyptian market along with to the lateness for obtaining the governmental as well as the regulatory approvals necessary for the deal completion. “All the required approvals to conclude the tie-up are on the way." El Mallawany noted Elsewhere, El-Mallawany referred that despite the current unstable condition of the Egyptian market, he sees that there will be a gradual progress within the coming period. As a result of the tie-up, QInvest will inject US$250 million in the form of a capital increase at the level of EFG Hermes Qatar that will be used in consideration for transferring the Business to the JV Company. EFG Hermes will have the right to sell its entire 40% shareholding in the JV Company to QInvest at any time during the period between 12 to 36 months from signing of the transaction at a price of EGP 1,000m (c.US$165m). QInvest will have the right to acquire from EFG Hermes its entire 40% shareholding at any time during the period between 12 to 36 months from signing of the transaction at the higher of US$165m or fair market value at the time of the exercise subject to a cap. At closing QInvest will also acquire from EFG Hermes 60% of the seed capital of the asset management business at market value. Closing is conditional on shareholder approval at the general assembly of EFG Hermes and the receipt of relevant regulatory approvals. The transaction is expected to be finalized by 2012 Q3. The deal means QInvest will control 60 per cent of the new bank, which will be called EFG-Hermes Qatar, and will pour in $250 million to increase its capital.
