EFG-Hermes: QInvest Deal By October, Reconvene Meeting Soon Upon EFSA’s Request

The Egyptian investment bank EFG-Hermes (HRHO.CA) expects a planned tie-up with Qatar’s QInvest to go ahead before October, the company said on Thursday, after Egypt’s financial market regulator, the Egyptian Financial Supervisory Authority (EFSA) suspended the deal Wednesday.

The EFSA rejected decisions approved by EFG shareholders last month because the firm did not clarify points including minority rights.

Dr. Ashraf Al-Sharkawy, EFSA Chairman,  was quoted as saying that EFG-Hermes must provide the required information and reconvene shareholders meeting for the deal to be completed.

“The group is confident that the previously announced plan for the deal will be completed by the end of the third quarter of 2012,” EFG-Hermes said in a statement on Thursday.

The bank said that it would call another extraordinary shareholder meeting soon to provide the additional disclosure that the EFSA required “as we are committed to full transparency”.

EFG-Hermes and QInvest sealed the agreement in May to hive off EFG’s investment banking business in a joint-venture in which state-backed QInvest would hold a 60 percent stake.

Economic turmoil since last year’s uprising in Egypt has left EFG, the Middle East’s biggest home-grown investment bank, lacking the means to expand across the region. The deal with energy-rich Qatar would give it more resources for its growth plans.