European Bank buys 2.5 percent of Bank Audi. $65 million deal is part of support package to the financial market - Lebanon

European Bank buys
2.5 percent of Bank Audi
$65 million deal is part of support

package to the financial market

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The European Bank for Reconstruction and Development (EBRD) has acquired 2.51 percent of Bank Audi’s overall outstanding common shares, for a total of $65 million.

The shares were bought on the Beirut Stock Exchange (BSE).

Bank Audi’s shareholders’ equity stood at $4.2 billion as at the end of 2017.

“This [investment] marks the EBRD’s first-ever investment in Lebanon, and its first equity investment in a banking institution in the southern and eastern Mediterranean (SEMED) region,” Bank Audi and EBRD announced in a joint statement.

The EBRD’s aim in investing in the local banking sector is to support the financial market and to act as a catalyst for the economy at large, according to the statement.

EBRD’s President Suma Chakrabarti said: “Supporting Bank Audi’s operations and corporate governance is crucial in maintaining its resilience in the challenging environment in the region.” He said that despite the crisis and the regional difficulties, the local banking system is very healthy.

Samir Hanna, Chairman and Group CEO of Bank Audi, said that that the deal deepens their “strategic partnership with the EBRD, which has already been a key partner for us in recent years in our operations in Egypt and Turkey.”

EBRD’s investments in Lebanon will also include the energy sector, especially renewable energy such as solar and wind power, according to Chakrabarti. EBRD will provide credit lines and advisory services to small and medium-sized enterprises (SMEs). The bank is also looking to make more investments in infrastructure through public-private partnerships (PPPs).

The EBRD is a multilateral bank that helps emerging countries develop market-oriented economies by financing their private sector. It promotes private sector and entrepreneurial initiatives in more than 38 economies.

Freddie Baz, Group Strategy Director, and Vice-chairman at Bank Audi, said that the EBRD is very selective regarding investments as it chooses sectors with high added value in terms of economic development. These sectors must have the potential to trigger economic growth and job creation, he said.
Reported by Shikrallah Nakhoul
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Date Posted: Mar 19, 2018