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Tuesday, 14 January 2020

Beltone to offload majority stake in Auerbach Grayson amid losses

M&A WATCH- Beltone to offload majority stake in Auerbach Grayson brokerage amid losses: Beltone Financial intends to sell its 60% stake in New York-based brokerage firm Auerbach Grayson before March in a bid to return the company to profitability, CEO Ibrahim Karam told Reuters. The board, which has authorized Karam to negotiate with prospective buyers, hopes the sale will reduce losses incurred since it bought the stake in 2016. “Although [Auerbach] helps us with a presence in more than 120 markets, the losses that come from it are big. We have a plan … that will be finalised before March,” he said. Beltone’s finances have sunk further into the red over the past three years, reporting a EGP 14.3 mn loss in 2017 and a EGP 82.4 mn loss in 2018. The company lost EGP 66.5 mn over the first three quarters of 2019.

Company targets Africa, Gulf expansion in 2020, eyes NBFS market: Beltone Financial is planning to set up shop in Gulf and African countries this year, Karam told the newswire without providing further details. The company wants to see non-banking financial services account for 30-40% of its revenues within three years, Karam added. The board has already approved setting up two new arms specialized in mortgage finance and financial leasing, in which the company will own a 98% stake, it said yesterday in an EGX disclosure (pdf). The Financial Regulatory Authority is currently looking into requests by Beltone to acquire licenses for the latter two activities, as well as for consumer finance, Hapi Journal reported last week.

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