Banque du Caire sale in 6-9 months

A public auction for 80% of state-owned Banque du Caire will take place in six to nine months, and another 15% will be floated on the stock exchange no more than a year later, a senior bank official said on Thursday.

Egypt announced on Monday it would privatise Banque du Caire, the country's third-largest state bank, and was looking for a strategic investor with adequate banking experience, manpower and technological capability to complete a restructure.

A cabinet spokesman had initially said an auction would take place at the end of summer, but Banque du Caire Vice President Mohamed Kafafi said more time was needed.

"It will take us six to nine months before we are ready for the auction," he said.

"We will need first to choose the sale adviser, which will happen through a competitive bid in a week's time. After that it will need time to study the bank and give us a price range."

The auction will be followed by an initial public offering for an additional 15% of the bank's shares within six to 12 months of the sale, said Kafafi, who is also vice-president of state-owned Banque Misr.

Kafafi said he had not yet received any expressions of interest for Banque du Caire, saying it was "still too early".

Egypt sold a majority stake in Bank of Alexandria in October last year to Italy's Sanpaolo for $1.6 billion in one of the largest privatisations of the year and a landmark in reducing the role of the state in the Egyptian economy.

Banque du Caire, which is held by Banque Misr, was initially slated to merge its operations with Banque Misr under a plan to create fewer banks that could compete more vigorously and tackle bad debts.

But Kafafi said: "Keeping Banque du Caire would have put higher pressure on our balance sheet and necessitated a capital increase. This way, we will have less pressure and cash to re-invest and will be able to have a clean portfolio by the end of 2008."

Kafafi added Banque Misr will continue financial restructuring measures before the sale and that Banque du Caire "will have a totally clean portfolio".

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