Shareholders of Al Baraka Bank Egypt approved a capital increase through the issuance of up to 63.23mn new shares with a nominal value of EGP7 ($01.3) per share, as part of a share-swap deal to acquire a controlling stake in Al Tawfeek Leasing Company (EGX:ATLC), according to disclosures filed with the Egyptian Exchange on May 9.
The newly issued shares will be allocated exclusively to shareholders of Al Tawfeek Leasing willing to exchange their holdings, enabling Al Baraka Bank Egypt to acquire up to 329.47mn shares in the leasing company. The transaction aims to raise the bank’s ownership stake to between 51% and 90% of Al Tawfeek’s capital.
The extraordinary general assembly also approved the fair value report prepared by BDO Keys Financial Consulting, which valued Al Baraka Bank Egypt’s share at EGP26 and Al Tawfeek Leasing’s share at EGP4.98. The approved swap ratio was set at 0.1919 Al Baraka shares for each Al Tawfeek share.
Shareholders authorised the bank to proceed with a mandatory tender offer for Al Tawfeek Leasing shares through a stock-for-stock transaction without a cash alternative. The bank also noted that it had received approval from the Central Bank of Egypt (CBE) for the acquisition. The difference between the nominal value and the fair value of the issued shares will be recorded as a reserve, while existing shareholders’ pre-emptive subscription rights will not apply to the capital increase.
The general assembly delegated the board of directors to finalise regulatory approvals, listing procedures and any amendments required by authorities to complete the transaction.
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