Dubai Group sells stake in Egypt’s EFG Hermes to Natixis

Dubai Financial Group, part of Dubai Group has announced that it has sold its 11.8% share in Egyptian investment bank EFG Hermes to France’s Natixis.

No financial details were disclosed but Fadel Al Ali, chairman of Dubai Group, said in a statement released announcing the transaction, that the sale of the company’s stake in EFG Hermes was in line with Dubai Group’s business plan which was agreed with its lenders as part of a restructuring deal.

The price of the transaction was not disclosed. Based on Thursday’s closing price, the stake is said to be worth around $107m, according to calculations reported by Reuters today.

EFG Hermes operates in the MENA region. It posted earnings of EGP48m (€4.8m) for the second quarter of 2016 and an operating revenue of EGP288m (€29m), up 10% year on year.

The group’s asset management branch had assets under management of US$2bn (€1.79bn) at the end of Q2 2016, down 13.7% on the previous quarter.

Debt restructuring

Dubai Group completed a restructuring of its US$10bn debt in January 2014, with banks extending repayment deadlines on loans so that the group could be given time to sell its assets to raise cash needed to fund the payments.

As part of its restructuring deal, it recently completed the sale of a 48.4% stake in Dubai-based Shuaa Capital to Abu Dhabi Financial Group (ADFG) for an undisclosed amount.

Dubai Group was obliged to divest its holdings in EFG-Hermes, Shuaa Capital and Bank Muscat this year, al-Ali, who is also chief executive of Dubai Group’s parent firm Dubai Holding, said in May.

Gary Robinson
Head of Video and Ezines at Open Door Media Publishing. Deputy Editor, International Investment. An experienced journalist and filmmaker with more than 20 years' financial services experience, both as journalist and originally as a fully qualified IFA, Gary works across both International Investment and InvestmentEurope titles. Previous video production credits include projects on BBC, C4 and SKY.

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