Sawiris' Beltone seeks stake of pan-African bank Oragroup to bolster growth

The Egyptian bank's investment will provide access to 12 African countries

Naguib Sawiris, the chairman of Orascom Telecom, re-launched his property unit Gemini as Ora Developers at Cityscape Global in Dubai this week Diego Levy/Bloomberg

Beltone Financial Holdings, the Egyptian investment bank owned by billionaire businessman Naguib Sawiris, wants to buy a major stake in pan-African bank Oragroup to bolster growth in frontier and emerging markets.

The investment bank plans to sign a non-binding offer outlining the terms of the transaction after the board approved a process potentially leading to an acquisition of “significant interest” in Oragroup, Beltone said in a filing to the Egyptian Exchange on May 19, without revealing the stake size or value.

“The consideration of this transaction is in line with the company’s plan to grow its investments and expand in the market of financial services on the African continent,” Beltone said.

The Egyptian investment bank, which is the country’s biggest asset manager with 30 billion Egyptian pounds (Dh6bn) of assets under management, said in February it is planning financial acquisitions outside Egypt to diversify its product offerings beyond equities. A potential acquisition of Oragroup will give Beltone access to 12 countries in western and central Africa with 143 bank branches serving more than 400,000 clients.

Oragroup reported a 45 per cent increase in net income to $40.1 million in fiscal 2017, according to a statement it released on April 13.

Beltone will conduct a preliminary financial feasibility study of the purchase before starting a due diligence process to reach an agreement on a possible acquisition. It will make further announcements on upcoming developments, it said.

In February, the company said it is also looking for acquisition opportunities in the leasing and consumer finance sectors in Egypt and may start a microfinance business, according to Bloomberg.

Beltone, through its New York brokerage Auerbach Grayson, is planning to open its first international office in London as part of global expansion efforts, it said in a statement on April 24. The London office is slated to open in June.

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The investment bank posted first-quarter net loss of 7.1 million Egyptian pounds compared to 2.5m pounds in the same period a year ago. Standalone revenue for the quarter dipped to 2m pounds versus 3.3m pounds a year earlier.

This year, Beltone expects to manage as many as three IPOs in Egypt in the consumer, health care and industrial sectors and has applied to co-manage a share sale in Nigeria, according to Bloomberg.

Beltone shares closed up at a two-year high, rising 6.8 per cent.