Saudi Arabia has reportedly shelved a plan by its sovereign wealth fund to acquire the United Bank of Egypt as talks with Egyptian authorities has stalled over a disagreement about how to value the multi-million-dollar transaction.
Sources told Bloomberg that talks over the acquisition of the state-owned lender have faltered over how to account for the plunging value of the Egyptian pound.
Saudi Arabia’s Public Investment Fund (PIF) began talks with the Egyptian government to acquire the state-lender bank last December, part of the Gulf state’s $10 billion pledge to help shore up the finances of the North African country.
PIF wanted to value United Bank in Egyptian pound with the dollar amount determined at the time of the transaction, while the Central Bank of Egypt preferred a dollar-based valuation from the start.
Egypt unveiled plans to sale government stakes in 32 companies including United Bank, Banque du Caire and Arab African International Bank earlier this month.
The pause is the most recent stumble in vast investment programme promised by GCC countries after the war in Ukraine prompted foreign investors to pull more than $20 billion out of Egyptian markets, throwing its economy into crisis.
Saudi Arabia, the UAE and Qatar pledged to make large investments to bolster Egypt’s coffers last year. The kingdom deposited $5 billion with CBE last March and in June said it intended to lead $30 billion worth of investments following a visit to Cairo by Crown Prince Mohammed bin Salman. PIF-owned Saudi Egyptian Investment Co (SEIC) also acquired minority stakes in four Egyptian companies worth $1.3 billion last August.
