CAIRO: A group led by U.S. fund Ripplewood Holdings will buy an 18.7 percent stake in Egypt s Commercial International Bank (CIB) for $227 million to $244 million, a banking source said on Tuesday.
It s being sold to a consortium led by Ripplewood, the source, who asked not to be identified, told Reuters, adding that the stake was worth about LE 1.3 billion to LE 1.4 billion ($227 million to $244 million).
The stake is currently held by state-owned National Bank of Egypt, which said at the end of January it was close to finalizing a sale at LE 53.50 a share. This price would value the stake at about LE 1.3 billion.
CIB officials had no comment. CIB and National Bank of Egypt are due to make an official announcement about the stake sale at a news conference on Wednesday.
The bank s shares were up 8.7 percent at LE 73.50 at 13:31 GMT, after earlier reaching an all-time high at LE 79. The benchmark Hermes index was up 0.7 percent.
Investment bank EFG-Hermes said this month that it put fair value for CIB at LE 60.70 a share.
Ripplewood, which is named after a Kentucky tobacco firm, made its name as the first foreign buyer of a Japanese bank in 1999. The banking source said the entrance of Ripplewood into the Egyptian market would encourage other foreign investors.
When those guys enter a country, they have a lot of followers, the source said, adding that it would encourage serious interest in Egypt.
Foreign investors have been attracted to Egypt in greater numbers since a cabinet packed with economic reformers was appointed in mid-2004.
Since then, the government has slashed taxes and revived a privatization program, which had slowed almost to a halt. Several state-owned stakes in commercial banks have been sold to foreign institutions.
CIB, whose shares are already popular with foreign investors, increased its net profit by 20.6 percent to LE 610.14 million in 2005, compared with a year earlier. Reuters