CAIRO: Egyptian investment bank Beltone Financial said its chairman was in talks to sell his stake in the bank, while investment firm Arabiyya Lel Estithmaraat said it was seeking to buy the stakes of several Beltone shareholders.
Egyptian investment banks were hit especially hard after foreign investors pulled out of the country and trade on the stock exchange slumped in the wake of the uprising that ousted President Hosni Mubarak in February.
Mohamed Youssri, chief financial officer of Arabiyya Lel Estithmaraat, which finances infrastructure, real estate and industrial projects, said on Tuesday his company has been negotiating to buy shares in Beltone.
"There are certain negotiations with some of the investors of Beltone in this regard, but nothing is yet final. The chairman is talking to more than one shareholder," Youssri said.
According to Reuters data, Beltone has a market capitalisation of 109 million Egyptian pounds ($18 million). As of June 30, chairman Aladdin Saba owned a 19.99 percent stake.
"If Alaa is selling, it is not an exit but most probably a strategic tie-up or swap for shares in a new entity," said a Dubai-based fund manager. "Alaa is the founder and he runs the show. I cannot see the entity existing without him unless someone is looking to acquire the whole bank."
Abdul Kadir Hussain, chief executive of fund manager Mashreq Capital, said valuations and the business outlook made it a difficult time for any financial institution.
"There is obviously a lot of uncertainty globally and regionally on where markets are heading in the next 10-18 months. It is not the best time to sell a stake in a financial institution."
The stock exchange temporarily suspended trade on Beltone's shares during Tuesday. The shares rose 5 percent when trading resumed. The benchmark index closed 0.4 percent lower.
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