EFG Hermes Holding SAE : EFG Hermes’ strategic partnership with QInvest injects $250m of FDI into the Egyptian economy - English
06/03/2012| 05:45pm US/Eastern
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EFG Hermes' strategic partnership with QInvest injects
$250m of FDI into the Egyptian economy - English[
6/3/2012]
The agreement helps restore confidence in the Egyptian
investment environment and will pump more liquidity into the
Egyptian capital markets
Cairo, 3 June 2012 - EFG Hermes Holding S.A.E. ("EFG Hermes
Holding or the "Company) is pleased to announce that the
Company's shareholders', including its primary shareholders;
Abu Dhabi Investment Authority and Dubai Financial Group,
have overwhelmingly voted in favour of all the items on the
agenda of its Extraordinary General Assembly Meeting ("EGM),
paving the way to implement the strategic alliance with
QInvest. The resulting joint venture company, EFG Hermes
Qatar, will be 60% owned by QInvest and 40% owned by EFG
Hermes.
Commenting on the transaction Mona Zulficar, EFG Hermes
Holding Chairperson said, "This strategic alliance will boost
the Egyptian economy with foreign direct investment of $250
million and will play a vital role in restoring investors'
confidence in Egypt's economic environment that has been
negatively impacted by the recent political upheaval.
The joint venture will potentially play a pivotal role and
will be a strong catalyst for speeding up the pledged
investments from the Gulf countries, potentially bringing in
huge amounts of foreign currency investments into the
Egyptian economy.
According to Zulficar, EFG Hermes has been advised for the
past two months by J.P. Morgan, a top-tier global financial
advisory firm and Freshfields, a leading international law
firm. As a result of the transaction, the proceeds will be
utilized to distribute a dividend of EGP 4 per share,
representing a dividend yield per share of 36%, in the form
of actual annual profits, capital gains, retained earnings
and capital reduction, she added.
Zulficar pointed out that after reaching the required quorum
in the EGM, the shareholders approved to enter into a
strategic alliance with QInvest that would see a transfer of
ownership of a number of subsidiaries currently held by EFG
Hermes. These include the Brokerage, Research, Asset
Management, Investment Banking and Infrastructure Fund
businesses along with all the tangible and intangible assets
necessary to carry out these businesses and the brand name of
EFG Hermes, to EFG Hermes Qatar. Such businesses within the
perimeter have contributed 14.6% and 24% to the total EFG
Hermes Holding revenues in 2011 and 2010 respectively (an
average of 19.13%). "This partnership will not, by any
means, affect the legal or financial arrangements between the
Company and other third parties whether individuals or
corporations, she emphasized.
As part of their resolutions presented, shareholders have
voted in favor of the transfer of 60% of the seed capital of
the asset management business to QInvest at market value on
the date of closing.
In addition, shareholders' have approved the valuation report
presented by the Independent Financial Advisor, which has
been approved by the board of directors by virtue of its
meeting held on May 29, 2012, and approved by the company's
auditor, concerning the fair value of a number of companies
subject to the strategic alliance
Furthermore, the shareholders have authorized the EFG Hermes
Board of Directors to exercise a put option granted by
QInvest to sell the remaining 40% shareholding in the EFG
Hermes Qatar to QInvest in accordance with the terms and
conditions of the agreements entered into with QInvest for a
consideration of EGP 1 billion. In addition, shareholders'
have authorized the board of directors to grant QInvest a
call option to acquire from EFG Hermes the remaining 40%
interest owned in EFG Hermes Qatar pursuant to the terms and
conditions of the agreements entered into with QInvest in a
consideration of USD 165,000,000 (with a maximum value to the
purchase price). Such call and put options will be
exercisable during the period starting the 12th month until
the 36th month following the date of the approval of the
board of directors on the strategic alliance with
QInvest.
When asked about the news covered in various media outlets
regarding the Planet IB Ltd. intention to launch a tender
offer to acquire 100% of EFG Hermes Holding shares, Zulficar
replied, "EFG Hermes has received from Planet IB Ltd two
letters, dated 30/5/2012 and 1/6/2012. The letters were read
to the shareholders at the beginning of the EGM. They stated
that Planet IB were offering to acquire EFG Hermes Holding
shares at a minimum price of EGP 13.5 per share. Such
offer is conditional to the completion of legal, financial
and technical due diligence during a period of 60 days. "The
letters did not provide any legal commitment or guarantee to
EFG Hermes Holding nor to its shareholders to conclude such
tender offer. Additionally, no proof to availability of funds
has been presented to the Company nor any information about
the identity of the investors who will provide the necessary
funds for the tender offer, She added.
Planet IB Ltd should have filed its tender offer to the
Egyptian Financial Supervisory Authority under the provisions
of Chapter XII of the Executive Regulations to the Capital
Market Law no. 95 for the year 1992, regardless the approval
of the Company's shareholders, general assembly, or the
management.
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