Ripplewood syndicate sells Actis Egyptian bank stake for $244m

The investment in Commercial International Bank marks the largest MENA deal done in 2009.

Emerging markets private equity specialist Actis will acquire a 9.33 percent stake in Egypt’s Commercial International Bank (CIB) for $244 million from an investor consortium led by Ripplewood Holdings.

The deal, structured in the form of global depository receipts priced at $8.93 each, is the region's largest this year.

The selling consortium, which also includes hedge fund Eton Park and the International Finance Corporation, acquired an 18.7 percent stake in CIB for approximately $230 million in February 2006, a spokesman said. A Ripplewood spokesman told Reuters the firm is divesting its entire 3.2 percent stake in the bank as part of the Actis deal.

CIB will use the investment to step up its growth in the consumer banking sector, Hisham Ezz Al-Arab, the bank’s chairman, said in a statement.

The bank deal represents the anchor investment for Actis Emerging Markets 3, which closed on $2.9 billion in December 2008. At the time, the fund was already 12 percent invested and 15 percent committed in eight transactions including the $700 million buyout of power equipment maker Alstom in South Africa; a $50 million investment in a Chinese hot pot chain; and a $15 million investment in a copper and cobalt exploration company in the Democratic Republic of the Congo.

Headquartered in Cairo, CIB is the highest-rated Egyptian bank by ratings agencies Standard & Poor's, Moody’s and Fitch, capped only by the sovereign ceiling for Egypt set at BB+. It manages total assets of EGP62 billion ($11 billion; €8 billion) and has 155 branches and 492 ATMs across the country. CIB’s shares were trading at $8.50 at press time.