Zulficar: Qatari Regulatory Approval On Hermes-QInvest Deal Next Week

Mona Zulficar, EFG Hermes’ Board of Directors Chairperson, told Amwal Al Ghad that Qatar’s financial regulator – the Qatar Financial Centre (QFC) will be submitting its final approval for the joint venture between Hermes and Qinvest withihn the coming week. The QFC’s approval comes after receiving all the required documentations on the acquisition deal, Zulficar added.

In an exclusive statement to Amwal Al Ghad, Zulficar said the Hermes-Qinvest deal has obtained approvals from 11 financial regualtors of the countries where EFG-Hermes (HRHO.CA) has branches.

Yasser El Mallawany – Chief Executive Officer of EFG Hermes – noted that the procedures to finalize the tie-up are going to the right track amid the successive approvals from the financial regulators. Accordingly, he expected the compeltion of the tie-up within the coming period.

Pursuant to the agreement, EFG Hermes and QInvest will enter into an alliance where 60% will be owned by QInvest and 40% owned by EFG-Hermes holding. The JV Company shall be the entity holding the Business post-closing.

As a result of the transaction, QInvest will inject US$250 million in the form of a capital increase at the level of EFG Hermes Qatar that will be used in consideration for transferring the Business to the JV Company.

EFG Hermes will have the right to sell its entire 40% shareholding in the JV Company to QInvest at any time during the period between 12 to 36 months from signing of the transaction at a price of EGP 1,000m (c.US$165m). QInvest will have the right to acquire from EFG Hermes its entire 40% shareholding at any time during the period between 12 to 36 months from signing of the transaction at the higher of US$165m or fair market value at the time of the exercise subject to a cap.

At closing QInvest will also acquire from EFG Hermes 60% of the seed capital of the asset management business at market value.

Closing is conditional on shareholder approval at the general assembly of EFG Hermes and the receipt of relevant regulatory approvals. The transaction is expected to be finalized by 2012 Q3.

The deal means QInvest will control 60 per cent of the new bank, which will be called EFG-Hermes Qatar, and will pour in $250 million to increase its capital.

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