Natixis Said to Force Dubai Group Sale of EFG, Bank Muscat

Natixis to Sell Dubai Group Assets
  • Bank said to work with Moelis on EFG, Bank Muscat stakes
  • Lender said to provision for shortfall on $1.1 billion loan

Natixis SA is holding discussions to find buyers for Dubai Group LLC banking assets that back a $1.1 billion loan to the company as it seeks to recover funds from the deal.

The French lender is working with U.S.-based boutique investment bank Moelis & Co. to find a buyer for the Dubai firm’s almost 12 percent stakes in both EFG-Hermes Holding SAE, the biggest listed Arab investment bank, and Bank Muscat SAOG, Oman’s largest lender, said the people, asking not to be identified because the information is private. The stakes are worth a combined $391 million, according to Bloomberg calculations.

Natixis is enforcing its right to seek a buyer for the assets under the terms of a restructuring deal Dubai Group made with its creditors two years ago. As part of that agreement, Natixis had the option to sell the stakes if Dubai Group hadn’t repaid the loan by the end of March.

Dubai Group, controlled by Dubai Holding LLC, was among several companies in the emirate that were forced to delay loan repayments arranged before property prices slumped and credit markets froze after the 2008 global credit crisis.

EFG shares rose 2 percent to 10.10 Egyptian pounds by 12:28 p.m. in Cairo, giving the company a market value off 6.2 billion pounds ($702 million). Bank Muscat shares were unchanged at 0.4 Omani riyals in Muscat.

Shortfall

Natixis could face a shortfall of as much as $700 million if a sale goes ahead at current market prices, though the French bank has already made provisions for losses it may incur on the sale of the assets, the people said. Natixis and Dubai Group declined to comment.

Dubai Group is also working with Emirates NBD PJSC to help find a buyer for its stake in investment bank Shuaa Capital PSC, people familiar with the matter said in April. The sale process is at an early stage and may not result in a deal, said the people. Dubai Group holds a 48 percent stake in Shuaa worth about $100 million, according to data compiled by Bloomberg.

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