After Chimera’s acquisition… Will Beltone lead the non-banking financial services sector?

The current shareholders of the Beltone investment bank also have high hopes, after the Emirati Chimera took over the share of the main shareholder, Orascom Investment, with an offer of 1.4 pounds submitted at the beginning of June.

Capital markets analysts said the rise in the share price following the acquisition was one of the fruits the company is expected to reap, similar to Chimera’s rapid investment strategy, which has begun intensive restructuring procedures, with around £1bn being set aside. to start structuring and repositioning and repositioning Beltone Financial Holding, which owns several different branches that facilitate its expansion process in the Egyptian market, with Beltone increasing its capital to 10 billion pounds and source to 11 billion, in order to allocate this increase for repayment of its debts and use about 85% to provide the necessary liquidity to cover the company’s business expansion needs in the future.

Beltone Financial recently suffered back-to-back losses that prompted the main shareholder, Naguib Sawiris, to exit and focus his investments on gold and real estate, leaving the financial transaction arena for Chimera, which took advantage of Beltone Financial’s falling prices. , open a new investment branch for it in the Egyptian market and transfer it to the ranks of investment banks in the local market and in the East. Al-Awsat, as an Emirati company, has major expansions in the Arab and foreign markets, and is expected to attract much of the expertise needed to transform Beltone from losses to profitability over the coming period.

The first step in structuring Beltone

Last November 8, the Board of Directors of Beltone approved the obtaining of a subsidiary loan – Hassan – from Chimera in the amount of 1.34 billion pounds, for a period of 12 months without interest, to provide the necessary liquidity to support the activities of the holding company. and its subsidiaries, along with the improvement and development of its technological systems, and the strengthening of the group’s financing structure.

In addition to the change in Beltone’s management structure with the appointment of Dalija Khorshid as Managing Director and Chief Executive Officer.

Beltone Financial Holding’s second step followed the announcement of a subscription procedure for a £10 billion increase in the issuer’s capital, increasing the issuer’s capital from £929.9 million to £10.92 billion, an increase of £10 billion spread over 5 billion shares from nominal value of £2 per share.

She noted that the proceeds of the subscription will go towards paying off loans and buying new companies, using this increase of around 15% to pay all or part of the debts and loans held by the company and its subsidiaries, and 85% of the increase will be aimed at providing liquidity for the acquisition companies and increasing the expansion process.

Mohamed Hassan, managing director of Bloom Investment Management, said Chimera has a solid asset management sector, which is working to implement the latest management practices and systems around the world.

He added that Chimera is working on the management of traded funds and venture capital funds, which exceed 16 funds in the Arab Gulf countries, with several financial investments and the conclusion of acquisition agreements that increase its ability to expand and expand, which encourages traders to increase confidence in the Emirates group, to transform Beltone into a major investment bank on the Egyptian market in the coming period.

Hassan stated that Beltone’s resort to increasing issued and paid-up capital comes as a positive step in confirming the confidence of investors and shareholders in its desire to expand and turn around profitability, while gaining the largest share of the money market in Egypt. and the Middle East in the coming period.

He pointed out that the recent recapitalization measure and directing about 85% of the recapitalization to ensure the necessary liquidity for the establishment of new companies and the acquisition of existing companies predicts the extent to which the future of Beltone will change, and Chimera’s ability to transfer the company to the ranks of investment banks, which pushes investors to long-term investments .At Beltone Holding.

Sector of non-banking financial services

Amr El Alfy, Head of Research at Prime Securities Brokerage Company, said that the non-banking financial services sector has been among the most prominent beneficiaries of the various crises that the Egyptian market has witnessed in recent years, as it has witnessed extraordinary development and growth supported by attracting a segment of clients in various categories.

Alfy expected the sector to witness more mergers and acquisitions of shares of non-bank financial companies combined with falling share prices despite growing opportunities in it, and that his companies could face various crises, especially in light of digital transformation and reliance on financial technology as entities would be provided with more financing alternatives. Especially in the light of the attention that the state pays to this aspect

Beltone Financial Holding recorded a loss during the first nine months of this year worth £132m, compared to a £10m profit in the same comparative period.

While the company’s revenues were around £124m, compared to £131m in the same comparative period.

As for independent papers, Beltone suffered losses of £66m, compared with £49m in the same comparative period last year.

While the company recorded standalone revenues of EGP 29 million, compared to EGP 16 million for the comparative period.