BEIRUT: Chairman of Credit Libanais Joseph Torbey said Thursday a group of Lebanese and Arab investors have secured $332 million to buy nearly two-thirds of Cairo-based EFG Hermes’ 63.74 percent stake in the bank.
“We have managed to bring prominent investors from Lebanon, Gulf and Arab states to buy [40 percent of Credit Lebanais out of] the the stake of EFG Hermes. This is considered a big achievement given the delicate situation in Lebanon,” Torbey told The Daily Star in an exclusive interview.
He added that the money is currently in an escrow account at the Central Bank until Governor Riad Salameh gives his final approval for the transaction in June of this year.
An escrow account is a temporary passthrough account held by a third party during the process of a transaction between two parties.
Torbey declined to give the names of the investors but assured that the list does not include any politician.
There were rumors that ex-premier Najib Mikati was approached to buy a stake in EFG Hermes.
Torbey refused to comment on reports that Lebanese banks were negotiating with EFG Hermes to buy its entire stake in Credit Libanais.
Some news media reported that Cedrus Bank and Saradar groups were showing interest in buying the entire EFG Hermes share, 63.74 percent of the bank, for $480 million.
“I have exclusive mandate from EFG Hermes to find new investors to buy the stake in the bank,” he added.
Credit Libanais said in a statement EFG Hermes would keep the remaining 23.74 percent and would extend the mandate to Credit Libanais Investment to sell the remaining shares until November 2016, and this deadline can be extended further to the end of May 2017.
Torbey said the solid reputations of the Central Bank and Credit Libanais in the international markets have encouraged Lebanese and Arab investors to buy a stake in the bank.
“The Americans and the international community always state that there are two elements that keep Lebanon stable: the Lebanese army and the banking sector,” he said.
Torbey replied to media reports that claimed he rejected other bank requests to examine the accounts of Credit Libanais as a condition to buy the stake of EFG Hermes.
“We are in a country where banks are a regulated business and all the accounts are subject to the supervision of the Central Bank and the Banking Control Commission. In addition, we have banking secrecy and an exclusive mandate from EFG Hermes to find buyers,” he said.
A statement by EFG Hermes confirmed the report that 40 of its 63.74 percent stake in Credit Libanais has been initially sold to a group of Lebanese and Arab investors.
“Proceeding with all necessary steps required to complete the sale of 9,408,749 shares of its holding in Credit Libanais S.A.L., representing 40 percent of the total outstanding shares of the Bank, at a gross [prior to payment of associated fees] price of $33 per share to a consortium of Lebanese and Arab Investors.”
The statement said the transaction would be only completed once the Central Bank of Lebanon gives its final approval and expected an answer no later than June 30, 2016.
“Entering into an underwriting agreement with Credit Libanais Investment Bank S.A.L., a wholly owned subsidiary of Credit Libanais, which will guarantee the sale through an irrevocable underwriting agreement of the remaining 5,506,134 shares indirectly owned by EFG Hermes in Credit Libanais. This represents the remaining holding of EFG Hermes in Credit Libanais, with execution taking place at the same price, on or before May 31, 2017.”The investment bank said it appointed Grant Thornton as independent financial adviser to issue an IFA report that will be presented along with the financial auditor report to the board for approval before the sale execution.
“The board [of the bank] also highlighted in its meeting that the completion of both phases of the transaction amid existing challenging environment reflects positively on the strength of the Lebanese banking sector and the policies of the Central Bank, and more specifically mirrors investors’ confidence in Credit Libanais’ management,” the statement said.
Bloomberg News said EFG Hermes were keen to sell its stake in Credit Libanais as it faces growing competition at home.
“Billionaire Naguib Sawiris is combining two investment banks to challenge the Cairo-based lender’s market dominance. Over the past year, EFG-Hermes has started a leasing business and acquired a micro-financing company,” the agency said.
