Suitors line up to buy 80% of Egyptian bank
June 27, 2006
By Alain Navarro
Cairo - The battle to acquire 80 percent of Bank of Alexandria (BOA), the fourth-largest and only one of four major Egyptian state banks up for sale, is heating up with a final list of 12 European and Arab suitor banks.
Estimates of the final price ranged from $880 million (R6.4 billion) to $1.25 billion.
The privatisation of the bank is one of the centrepieces of the restructuring of the banking system undertaken by Prime Minister Ahmed Nazif's government, which aims to reduce the number of Egyptian banks from 60 to 26.
The government is conducting an ambitious privatisation plan that includes the sale of 170 companies, amid growing economic nationalism and uncertainty concerning the transition of power.
Candidates have two more weeks to present their bids. Among them are Egyptian frontrunner Commercial International Bank, France's BNP Paribas, Jordan's Arab Bank and Britain's Barclays, which owned the bank before it was nationalised in 1957.
Banking sources in Cairo said others in the running included the Dutch ABN Amro, Singapore's Standard Chartered, the Commercial Bank of Kuwait and United Arab Emirates' Mashreq Bank, as well as Greek lenders National Bank of Greece, EFG Eurobank Ergasias and Piraeus Bank.
Out of the 13 expressions of interest received by the Central Bank of Egypt last month, one candidate had since merged its bid with Arab Bank, said a source close to the BOA dossier.
"It's going to be a major tussle between all candidates and ultimately the highest bidder should win," said Adrian Phares, the director-general of Calyon Egypt, a branch of France's Credit Agricole-Indosuez, which is not one of the bidders.
The central bank plans to float between 15 percent and 20 percent of BOA on the Cairo-Alexandria stock exchange and reserve a 5 percent stake for employees.
As of February this year, BOA had assets of 39.8 billion Egyptian pounds (R54 billion), or 5 percent of the market.
BOA holds 6 percent of all customer deposits in Egypt and has 188 outlets across the country. - Sapa-AFP
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