Moheiddin: IPO timing dependent on appropriateness of market conditions
CAIRO: The Ministry of Investment (MOI) issued an announcement Saturday inviting investment banks to submit proposals for the initial public offering (IPO) of 15 percent of the Bank of Alexandria (BOA), or 24 million shares. The deadline for submission is March 1.
A MOI official declined to disclose when the ministry plans for the IPO to take place. The government now owns 20 percent of BOA, of which it plans to float 15 percent on the Cairo and Alexandria Stock Exchange and allocate 5 percent to its workers numbering almost 7,000.
In the first ever privatization of a state-owned bank, 80 percent of BOA was sold in August to Sanpaolo IMI Group for $1.61 billion (LE 9.2 billion). Sanpaolo, Italy s largest bank in terms of assets, is yet to announce its plans for BOA.
Minister of Investment Mahmoud Moheiddin said the government will wait as long as is necessary for the appropriate market conditions to make the public offering of BOA. The bank s issued capital stands at LE 800 million divided over 160 million shares.
BOA is estimated to hold a 6 percent share of local deposits. Its client base reached more than 2 million by the end of 2005, up from 600,000 in 2002 when an aggressive government restructuring plan placed senior management of all four public banks in the hands of the private sector. New leadership cut down BOA s work force by more than 15 percent to 7,000 workers at the end of 2005 and increased computer use.
According to the Ministry of Finance, the government has spent more than LE 8 billion to prepare the bank for privatization including LE 6.9 billion to settle its loan portfolio earlier this year and LE 450 million in early retirement packages.