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Tuesday, 21 March 2017

CIB completes sale of 74.75% of CI Capital, El Monayer says stamp duty to be levied on M&As

CI Capital is off CIB’s books: CIB announced it has executed the transfer of 74.75% of subsidiary CI Capital’s shares to a consortium of investors and to CI Capital’s management successfully for EGP 710.16 mn, according to a regulatory filing. The transaction gave CI Capital a valuation of EGP 950 mn and CIB retains a 25.24% stake “for the time being.” Total shares sold exceeded the 60-65% about which the market was speculating last week. CI Capital’s management team bought a 9.75% stake of CI Capital and the investment consortium bought 65%.

Of the investors, Arafa Group’s Alaa Arafa, Habitat Furniture owner Ismail El Turk, and construction magnate Mahmoud El Gammal took the largest stakes of the transaction with just shy of 9.9% each. They are followed by Fahad Khater, who bought 7.6%; Yasser El Adawy, with 6.2%; and Infinity Capital Investment, which took in 5.9% of the shares. Other members of the consortium include Seddik Afifi, members of Zahran family, Compass Capital, and Ayman Mamdouh Abbas. Al Mal says Mamdouh Abbas intends on buying a 1.5% stake in CI Capital soon.

CI Capital Deputy Chairman and CEO Mahmoud Attallah said a new board of directors for the investment bank will be appointed within two weeks as a general assembly is called. He added that the general assembly will also decide on what to do with the remaining shares, but market sources said they expect CIB to eventually offer its remaining shares on the stock exchange, according to Reuters. Al Borsa says the general assembly meeting has been set for 9 April, quoting Attallah, who reportedly also said CIB “will not sell more than 2% of its remaining stake” in the investment bank. The transaction will not be subject to the 0.125% stamp duty that is now in cabinet’s pipeline.

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