CAIRO/MILAN — An Egyptian court will rule shortly on a case centered on the 2006 sale of AlexBank to Italy’s Intesa Sanpaolo, two source said, potentially paving the way for the cash-strapped government to sell its remaining 20% stake in the lender.
Egypt is seeking to raise cash after its financial markets suffered heavy foreign investment outflows in the wake of the Ukraine war, throwing the economy into crisis.
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It recently announced the sale of government stakes in 32 companies, including three banks, Banque du Caire, United Bank of Egypt and Arab African International Bank.
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It did not mention AlexBank, though a sale of its remaining stake to Intesa is a possibility, one of the sources said.
In a major privatization deal, Egypt in 2006 sold 80% of AlexBank for $1.6 billion to Sanpaolo IMI, which the following year merged with Banca Intesa to create what is now Italy’s largest banking group.
The sale was challenged in court by activist group, the Egyptian Centre for Transparency, local media reported. But Egypt in 2014 passed a law that prevented any party other than those involved in a transaction from challenging sales or investment contracts signed by the state.
Egypt’s constitutional court in mid-January ruled to uphold that law rejecting a challenge brought against it.
A number of cases, including that centered around the sale of AlexBank, had been put on hold pending the decision on the law.
A court ruling on AlexBank is now expected in the coming days, the sources familiar with the case said, with one of them adding a decision may come as early as Feb. 25.
A legal source separately said the constitutional court’s decision would likely lead to any challenge about the privatization being dismissed.
With its 175 branches and 1.6 million customers, AlexBank is one of Egypt’s main private sector banks.
Intesa Sanpaolo owns 80% of the lender, after buying back in 2020 a 9.75% stake it had sold to International Finance Corporation in 2009, in a deal whose value the local press at the time put at $161.8 million. (Reporting by Patrick Werr in Cairo and Valentina Za in Milan; Editing by Emelia Sithole-Matarise)