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Wednesday, 7 April 2021

EFG, SFE closing in on AIB acquisition + El Salhiya is on the block

The Sovereign Fund of Egypt and EFG Hermes look set to wrap up their acquisition of Arab Investment Bank this quarter, SFE CEO Ayman Soliman tells Al Mal. The acquisition is pending regulatory approvals that are now in process with the Central Bank of Egypt, he added. It was due to be completed last month. Sources said some of the legwork took longer than expected. The fund and EFG plan to purchase up to 75% in the state-affiliated investment bank through a capital increase to EGP 5 bn. EFG would become the controlling shareholder with at least 51% — transforming into a universal bank in the process — while the SFE would take no more than 25%.

Meanwhile, the SFE has been working to drum up investor interest in commodities producer El Salhiya Investment and Development, Soliman said. The fund is trying to get investors to partner with the company to modernize its farming techniques without necessarily selling stakes in the company, Soliman said. Instead, the investors, which Soliman says could be anyone, will be invited to set up joint ventures on land owned by the company, with a focus on producing dairy products and agrifoods that can be processed in factories.

What’s El Salhiya? The company is considered parastatal, meaning its activities are separate from the government but is state-owned and subject to oversight by state officials, a government source told Enterprise. The company’s major shareholders are state-owned National Investment Bank (44%), Banque Misr (29.4%), and Arab Contractors (26.6%), our source said. It caters to the mass-market through commodity outlets that sell meat, dairy, and agricultural produce at reduced prices. The company’s capital was nearly EGP 12 bn in 2017 and owns at least 23k feddans of poultry, dairy, and agricultural commodity farmland.

Also from Soliman — SFE to set up database of army companies to drive marketing push: The fund will get a group of lawyers and accountants to build a database with relevant information on army-owned companies and make it accessible to investors interested in acquiring stakes, Soliman said, according to Al Mal. The fund signed an agreement with the Defense Ministry’s National Service Products Organization (NSPO) last year authorizing it to market subsidiaries of military-affiliated companies. Some 10 of those companies are lined up for sales to outside investors, and sales in both gas stations operator Wataniya Petroleum and bottled water company Safi are expected to take place this year. The Wataniya sale is well underway, with a consortium of ADQ and the Abu Dhabi National Oil Company (Adnoc) having already expressed interest.

CATCH UP QUICK:

Saudi renewables company Acwa Power has finalized an agreement to construct its USD 81.2 mn 200 MW solar plant in Kom Ombo under a 25-year BOO (build-own-operate) framework. The company signed the final agreements with the Egyptian Electricity Transmission Company and the New and Renewable Energy Authority, according to Al Arabiya. The photovoltaic solar facility will be financed through USD 40 mn in debt financing and a USD 14 mn equity bridge loan from the European Bank for Reconstruction and Development. Acwa is also expecting to receive a USD 27.2 mn loan from the African Development Bank to finance the project, which is slated to begin commercial operations in 3Q2022.

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