Egypt’s CIB Scraps Investment-Banking Unit Sale to Beltone

Commercial International Bank, Egypt’s largest publicly traded lender, scrapped a plan to sell its investment-banking unit to Egyptian billionaire Naguib Sawiris, ending a six-month effort mired in regulatory delays.

CIB won’t extend the agreement to sell its stake in CI Capital Holding to Sawiris’ Beltone Financial, the bank said in a statement on Thursday. It cited the “prolonged period” it has taken Beltone owner Orascom Telecom & Media Technology to obtain a no objection certificate from Egypt’s market regulator.

“I think it was already expected to fail; the regulator’s reaction and the deal’s developments made it unlikely for the deal to close," said Radi Elhelw, Cairo-based executive director at Arqaam Securities Brokerage SAE. “I don’t think there is much impact on the market."

The 924 million Egyptian-pound ($104 million) deal had been delayed since February, prompting Sawiris to say it was an example of political vendettas against him. The billionaire had described the plan as part of his strategy to create one of the country’s largest financial advisory firms in Egypt.

Beltone is “open to revisit” the deal once obstacles are removed, it said in a filing to Egypt’s stock market. In May Beltone’s board approved a 1 billion-pound rights offer to finance expansion inside and outside Egypt. Beltone agreed to buy U.S. brokerage firm Auerbach Grayson & Co. last week.

The Egyptian Financial Supervisory Authority froze any decision on the deal in April pending a ruling from the appeals court in a case involving CI Capital minority shareholders, which is now resolved, as well as violations relating to revising OTMT’s restructuring.

"The violations are separate from the deal, they will have to be cleared anyway," EFSA Chairman Sherif Samy said in a phone interview. "Once cleared, the deal can proceed if its parties want to."

Sawiris wasn’t immediately available to comment.

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