Egypt billionaire Sawiris to acquire CI Capital by month-end

Egyptian billionaire Naguib Sawiris will complete the acquisition of CI Capital Holding this month to create Egypt’s second-biggest investment bank.

The 924 million Egyptian-pound deal ($118 million) is in “execution mode” after the share-purchase agreement was signed, Sawiris said in an interview in Cairo on Sunday. He sees no regulatory objections to the deal. Shares of Orascom Telecom Media & Technology, Sawiris’ investment arm, advanced the most in six weeks.

The acquisition comes about four months after Orascom Telecom Media & Technology, majority owned by Sawiris, paid more than 600 million pounds for Beltone Financial Holding SAE, another investment bank. The billionaire is betting on an eventual recovery in the battered economy of the most populous Arab country, even as a foreign currency shortage hampers growth. Combining Beltone and CI Capital would create a company that controls about 25 percent of brokerage business in Egypt, Sawiris said.

“There’s a major crisis in the economy,” Sawiris said. “If you believe that when things get really bad, that’s when they start to get better, it’s the right time to” invest, he said. “The end game is definitely to create the largest player in Egypt.”

Market Opportunity

The acquisition of CI Capital is “purely a market opportunity because the investment, brokerage and asset management scene in Egypt was divided into one big player and lots of small and medium-sized fraction players,” he added, referring to investment bank EFG-Hermes. The nation’s benchmark stock index has tumbled more than 35 percent over the past 12 months, the world’s worst performer after Ukraine’s gauge.

In North Korea, where OTMT owns a controlling stake in mobile phone company Koryolink, Sawiris is in talks with the government to repatriate $120 million and solve a dispute with a state-owned peer over “unfair competition,” he said. New economic sanctions that have been placed on the country are complicating both issues, he said.

OTMT climbed 5.3 percent on more than twice the stock’s average volume in the last three months. The gain pared its loss this year to 15 percent, giving the company a market value of 3.1 billion pounds.

– Bloomberg