EFG Hermes and QInvest Deal Bottoms Out
EFG Hermes is one of the largest investment financial institutions in the Gulf region. It is now undertaking plans to cut costs, sell off non-core assets and pay dividends to its shareholders after its planned merger with QInvest did not follow through last Wednesday.
EFG had entered into an agreement last May to invest part of its asset portfolio into the creation of an investment bank with operations spreading across Africa, Turkey and the Middle East. For the venture, QInvest would have invested US$250 million for 60% shareholdings.
Last Wednesday, the two financial institutions had issued a joint statment saying that the deal had been terminated because of the lack of approval from Egyptian regulatory authorities. Because of this, it would be best to continue operations as distinct and independent companies towards the future.
In a separate statement to the Egyptian bourse, EFG said it would reducing its 'expenditure structure' by around 35% to around Egy500 million or around US$72.11 million for 2014. The company is expecting to spend around Egy780 million for 2013. It also announced the sale of non-core assets as well as pay dividends to its shareholders, after promising a one time payout of Egy4.00 per share.