Last checked at 15 Oct 2012 08:35
Note: The Egyptian Financial Supervisory Authority certified, with no reservations, yesterday (Sunday October 14, 2012) the Company's Extraordinary General Meeting minutes that was held on Sunday September 16, 2012 to approve the Company's strategic alliance with QInvest. Below is the translation of the minutes from Arabic.
TRANSLATION FROM ARABIC
Minutes of the Extraordinary General Meeting
EFG Hermes Holding S.A.E.
16th of September, 2012
The Extraordinary General Meeting (EGM) of EFG Hermes Holding S.A.E. ("EFG Hermes" or the "Company") convened on Sunday the 16th of September 2012, at 9:00 AM in the Mövenpick Hotel in Cairo Egypt as per the invitation sent to the EGM's members, the Company's shareholders, the Company's external auditor, and the Egyptian Financial Supervisory Authority. The meeting was chaired by Mrs. Mona Zulficar, Chairperson.
The meeting was attended by the following Board of Directors Members:
1- Mrs. Mona Zulficar, Chairperson
2- Mr. Yasser El Malawany, CEO and Board Member
3- Mr. Ramsay Zaki, Board Member
4- Mr. Takis Arapoglou, Board Member
Mr. Hassan Bassiouni, Partner at KPMG Hazem Hassan, the Company's external auditor also attended the meeting. Mr. Moustafa El Sakka and Ms. Soha el Kassar represented EFSA in the meeting.
Mrs. Zulficar commenced the meeting by appointing Mr. Ibrahim Moussa as the Secretary of the meeting, and Mr. Ahmed Abdel Karim and Mr. Mohamed Ismael to count the votes, with the approval of the EGM. The external auditor validated the procedures of EGM notice where it was shown that the agenda was attached to the meeting's notice, the invitation was sent to the Company's external auditor and to EFSA, and it has been published in two widely-spread local papers as per the law.
It was announced that 261,908,425 shares were present in the meeting out of the Company's total shares of 477,903,750 (excluding treasury shares of 391,000), which is equivalent to 54.80% of share capital. The Chairperson declared this constituted a quorum in accordance with the provisions of Article (45) of the Company's Articles of Association which requires attendance of 50% of the Company's share capital and therefore declared the meeting open.
The Extraordinary General Meeting resolved the following:
First
The EGM approved the Board of Directors' report with respect to the contemplated strategic alliance with QInvest LLC that involves the Company's Brokerage, Research, Asset Management, Investment Banking, and Infrastructure Funds businesses.
Second
The EGM approved the fair value report issued by the Independent Financial Advisor (IFA) Grant Thornton - which has been previously approved by the Company's Board of Directors' meeting held on 29/5/2012 in connection with the fair value of the Egyptian subsidiaries of EFG Hermes Holding S.A.E. subject to the strategic alliance and referred to in the IFA report. The Company's auditor had previously approved the IFA report in accordance with the provisions of Article (33) of the Egyptian Stock Exchange's Listing Rules.
The IFA report included all details concerning the sale of EFG Hermes Holding S.A.E.'s entire stake, held directly and indirectly, in its respective Egyptian subsidiaries that are intended to be transferred to EFG Hermes Qatar LLC as follows:
1- Egyptian Fund Management Group S.A.E.:
- Total value of 100% of the share capital: EGP 135,904,871
- Number of shares subject to direct sale: 309,800 shares
- Percentage of share capital to be directly transferred: 88,5%
- Fair value per share: EGP 388.29
- Execution value per share: EGP 388.29/share
2- Egyptian Portfolio Management Group SAE:
- Total value of 100% of the share capital: EGP 32,301,177
- Number of shares subject to direct sale: 19,900 shares
- Percentage of share capital to be directly transferred: 66.33%
- Fair value per share: EGP 1,076.7
- Execution value per share: EGP 1,076.7/share
3- Financial Brokerage Group S.A.E.:
- Total value of 100% of the share capital: EGP 63,702,228
- Number of shares subject to direct sale: 4,108,866 shares after the capital increase currently in process
- Percentage of share capital to be directly transferred after the capital increase currently in process: 99.88%
- Fair value per share after the capital increase currently in process: EGP 15.48
- Execution value per share: EGP 15.48/share
4- Hermes Corporate Finance S.A.E.:
- Total value of 100% of the share capital: EGP 9,376,979
- Number of shares subject to direct sale: 993,666 shares
- Percentage of share capital to be directly transferred: 99.37%
- Fair value per share: EGP 9.38
- Execution value per share: EGP 9.38/share
5- EFG Hermes Investment Funds Co. S.A.E.:
- Total value of 100% of the share capital: EGP 10,098,854
- Number of shares subject to direct sale: 999,980 Shares
- Percentage of share capital to be directly transferred: 99.998%
- Fair value per share: EGP 10.09
- Execution value per share: EGP 10.09/share
6- Hermes Fund Management S.A.E.:
- Total value of 100% of the share capital: EGP 7,360,093
- Number of shares subject to direct sale: 1,007,450 shares
- Percentage of share capital to be directly transferred: 89.95%
- Fair value per share: EGP 6.57
- Execution value per share: EGP 6.57/share
7- Hermes Securities Brokerage S.A.E.:
- Total value of 100% of the share capital: EGP 308,916,723
- Number of shares subject to direct sale: 43,910,370 shares after the capital increase currently in process
Percentage of share capital to be transferred directly after the capital increase currently in process: 97.58%
- Fair value per share after the capital increase currently in process: EGP 6.86
- Execution value per share: EGP 6.86/share
8- EFG Hermes Promoting & Underwriting S.A.E.:
- Total value of 100% of the share capital: EGP 132,810,457
- Number of shares subject to direct sale: 799,000 Shares
- Percentage of share capital to be transferred directly: 99.88%
- Fair value per share: EGP 166
- Execution value per share: EGP 166/share
Moreover, the IFA report also included the Egyptian subsidiaries which are currently partially owned by the perimeter companies of the new joint entity and whose shares are to be transferred directly to EFG Hermes Holding S.A.E. as shown below. Namely: EFG Hermes Management S.A.E. and EFG Hermes Fixed Income, these companies will not be transferred to EFG Hermes Qatar LLC.
1- EFG Hermes Management SAE
- Total value of 100% of the share capital: EGP 814,858
- Number of shares subject to direct sale: 14,816 Shares
- Percentage of share capital to be directly transferred: 3.7%
- Fair value per share: EGP 2.03
- Execution value per share: EGP 2.03/share
2- EFG Hermes Fixed Income SAE
- Total value of 100% of the share capital: EGP 8,165,427
- Number of shares subject to direct sale: 20,000 Shares
- Percentage of share capital to be directly transferred: 1%
- Fair value per share: EGP 4.08
- Execution value per share: EGP 4.08/Share
Third
The EGM approved the sale of EFG Hermes' entire stake, held directly and indirectly, in its respective subsidiaries operating in the Brokerage, Research, Asset Management, Investment Banking, and Infrastructure Fund businesses to EFG Hermes Qatar LLC in consideration for USD250 million, with the transfer of the Egyptian subsidiaries operating in the brokerage, fund management and portfolio management businesses to take place upon obtaining the EFSA's non-objection on transferring the ownership of over 20% of the share capital of such entities..
The following are the Egyptian companies owned directly or indirectly by EFG Hermes Holding S.A.E. and are intended to be transferred to EFG Hermes Qatar LLC:
1- EFG Hermes Promoting & Underwriting S.A.E. with a paid-in capital of EGP 8,000,000 equally distributed on 800,000 shares with a nominal value of EGP 10 per share. An amount of 799,000 shares will be transferred at a transfer price of EGP 166 per share, noting that the fair value according to the IFA report is EGP 166 per share.
2- Hermes Corporate Finance S.A.E. with a paid-in capital of EGP 5,000,000 equally distributed on 1,000,000 shares with a nominal value of EGP 5 per share. An amount of 993,666 shares will be transferred at a transfer price of EGP 9.38 per share, noting that the fair value according to the IFA report is EGP 9.38 per share.
3- Financial Brokerage Group S.A.E. with a paid-in capital of EGP 41,140,000 equally distributed on 4,114,000 shares with a nominal value of EGP 10 per share. An amount of 4,108,866 shares will be transferred at a transfer price of EGP 15.48 per share, noting that the fair value according to the IFA report is EGP 15.48 per share.
4- Hermes Fund Management S.A.E. with a paid-in capital of EGP 5,600,000 equally distributed on 1,120,000 shares with a nominal value of EGP 5 per share. An amount of 1,007,450 shares will be transferred at a transfer price of EGP 6.57 per share, noting that the fair value according to the IFA report is EGP 6.57 per share.
5- Hermes Securities Brokerage S.A.E. with a paid-in capital of EGP 225,000,000 equally distributed on 45,000,000 shares with a nominal value of EGP 5 per share. An amount of 43,910,370 shares will be transferred at a transfer price of EGP 6.86 per share, noting that the fair value according to the IFA report is EGP 6.86 per share.
6- Egyptian Portfolio Management Group S.A.E. with a paid-in capital of EGP 3,000,000 equally distributed on 30,000 shares with a nominal value of EGP 100 per share. An amount of 19,900 shares will be transferred at a transfer price of EGP 1,076.7 per share, noting that the fair value according to the IFA report is EGP 1,.076.7 per share.
7- Egyptian Fund Management Group S.A.E. with a paid-in capital of EGP 3,500,000 equally distributed on 350,000 shares with a nominal value of EGP 10 per share. An amount of 309,800 shares will be transferred at a transfer price of EGP 388.29 per share, noting that the fair value according to the IFA report is EGP 388.29 per share.
8- EFG Hermes Investment Funds S.A.E. with a paid-in capital of EGP 10,000,000 equally distributed on 1,000,000 shares with a nominal value of EGP 10 per share. An amount of 999,980 shares will be transferred at a transfer price of EGP 10.09 per share, noting that the fair value according to the IFA report is EGP 10.09 per share.
Also the following are the non-Egyptian companies owned (directly or indirectly) by EFG Hermes Holding S.A.E. and are intended to be transferred to EFG Hermes Qatar LLC:
1- EFG Hermes UAE Ltd.
2- EFG-Hermes MENA (Cayman) Holding Ltd.
3- MENA (BVI) Holding Ltd.
4- MENA Opportunities Management Ltd.
5- EFG-Hermes Brokerage - UAE Ltd.
6- EFG-Hermes Advisory Inc.
7- EFG Hermes KSA
8- EFG Hermes Financial Management Ltd.
9- EFG Hermes Oman LLC
10- EFG-Hermes MENA Securities Ltd.
11- Fixed Income Investment Ltd.
12- MENA Long-Term Value Feeder Holding Ltd.
13- MENA Long-Term Value Management Holding Ltd.
14- MENA Long-Term Value Master Holding Ltd.
15- EFG Hermes MENA FI Management Ltd.
16- MENA FI Cayman Ltd.
17- Offset Holding
18- EFG Hermes IFA Financial Brokerage
19- EFG Hermes Jordan
20- MENA Financial Investments W.L.L
21- MENA Access Cayman Holding Ltd.
Valuation for the above mentioned subsidiaries was carried out by JP Morgan, the Company's financial advisor, in accordance with international standards by treating all related subsidiaries as one entity and not each subsidiary independently.
According to JP Morgan, the valuation for the companies intended to be transferred to EFG Hermes Qatar LLC is fair and exceeded that valuation derived from the different valuation methods applied in their analysis.
Fourth
The EGM approved the transfer of the equivalent of 60% of the total seed capital injected by EFG Hermes Holding S.A.E., in a number of its managed funds, to QInvest LLC at market value at the last business day prior to transaction closing, which may vary from the current value as a result of prevailing market conditions. EFG Hermes Qatar LLC (through its respective subsidiaries post closing) will assume the management of such funds.
Following is the seed capital injected by EFG Hermes Holding S.A.E. in a number of funds under its management:
1- Total Partnership Interests held by EFG Hermes Holding S.A.E., representing 20% of EFG Hermes MENA Long Term Feeder Fund Ltd (Cayman).
2- An amount of 6,419,426 shares (A Shares), held in InfraMed Infrastructure (SAS) incorporated in France.
3- An amount of 318,656 certificates in Bank of Alexandria Mutual Fund I, incorporated in Egypt
4- An amount of 408,020 certificates in Egyptian Gulf Bank Mutual Fund, incorporated in Egypt
5- An amount of 1,248,755 certificates in Banque Du Caire Mutual Fund, incorporated in Egypt
6- An amount of 2,464 shares (Class C2 Shares), 205 shares (Class C3 Shares), and 24,280 Shares (Class F1 Shares) held in MENA Opportunities Ltd.
The EGM also authorized the Board of Directors to take all the procedures and actions necessary to decide on the respective share in the seed capitalthat will be transferred (as mentioned above), a procedure that will ultimately result in transferring an amount equivalent of 60% of the total seed capital injected by EFG Hermes Holding S.A.E. in such funds.
Fifth
The EGM approved, in principle, the distribution of EGP 4/share to the shareholders of EFG Hermes Holding S.A.E., and the potential consequences that such distribution may possibly lead to including a possible reduction of the nominal value per share and/ or the buyback of certain amount of shares at the same price from all shareholders on a pro-rata basis. The Company will pursue the respective procedures and necessary approvals required to effectuate such distribution - including, but not limited to, obtaining the EFSA's approval to on Form No.16 (in case of capital reduction) - following completion of the transfer of shares in the perimeter companies to EFG Hermes Qatar LLC and subject to receiving the AGM's approval prior to distribution as per applicable laws.
The EGM has also confirmed that the listing status of the Company's shares on both, the Egyptian Exchange and London Stock Exchange, will remain unchanged.
Sixth
The EGM approved the transfer of the trademark of EFG Hermes Holding S.A.E. "EFG Hermes" definitively to EFG Hermes Qatar LLC, within one year of completing the transfer of ownership in the transaction perimeter companies to EFG Hermes Qatar LLC, and approved in principle, in such case, to amend the name of EFG Hermes Holding S.A.E. to be the "Egyptian Financial Group".
Seventh
The EGM approved the following:
a. Put option, whereby EFG Hermes Holding S.A.E. will have the right to sell to QInvest LLC the remaining 40% interest owned by the Company in EFG Hermes Qatar LLC pursuant to the terms and conditions of the agreement entered into with QInvest LLC for a consideration of EGP 1,000,000,000 (one billion Egyptian Pounds). The put option is exercisable following the 12th month and until the 36th month from the date EFG Hermes Holding S.A.E. Board of Directors' approved entering into an agreement with QInvest in connection with such transaction (N.B.: the agreement was signed on 3/5/2012).
b. Call option, whereby QInvest LLC will have the right to acquire the remaining 40% interest owned by the Company in EFG Hermes Qatar LLC in consideration for a floor price of USD 165,000,000 or the fair value at the time of execution, with such fair value being subject to a ceiling price that is determined as per the following:
- If the call option is exercised on the date that is 12 months after the date of of signing the JV agreement, the exercise price will be capped at 150% of the call floor price (i.e.: equivalent to USD 247,500,000).
- If the call option is exercised on the date that is 24 months after the date of signing the JV agreement, the exercise price will be capped at 175% of the call floor price (i.e.: equivalent to USD 288,750,000).
- If the call option is exercised on the date that is 36 months after the date of signing the JV agreement, the exercise price will be capped at 200% of the floor price (i.e.: equivalent to USD 330,000,000).
The call option is exercisable starting the 12th month until the 36th month following the date of the Board of Directors of EFG Hermes Holding S.A.E. approved the execution of the agreements related to the strategic alliance with QInvest LLC. (N.B.: the agreement was signed on 3/5/2012).
c. Authorizing the Board of Directors to exercise the put and accept the call option in accordance with the terms and conditions of the respective agreement.
Eighth
The EGM approved a non-compete clause in favor of EFG Hermes Qatar LLC, whereby neither EFG Hermes Holding S.A.E. nor its subsidiaries shall be engaged in the businesses of the companies that will be transferred to EFG Hermes Qatar LLC; namely the Brokerage, Asset management, and Investment Banking businesses; with that being enforceable promptly following the closing of the transaction and for a period of two years from the date of sale of EFG Hermes Holding S.A.E.'s remaining 40% stake in EFG Hermes Qatar LLC to QInvest LLC (in case of execution of the sale).
Ninth
The EGM authorized the Board of Directors to take all the legal procedures and actions necessary to conclude the strategic alliance with QInvest as per the agreed upon structure and has delegated Mr. Hassan Mohamed Hassanein Heikal, the Chief Executive Officer and Mr. Yasser Hisham el Mallawany, the Chief Executive Officer, and Mr. Ramsay Adel Nasif Zaki the Chief Operating Officer to sign on behalf of the Company all the documents needed in this regard, as well as carrying out all the necessary procedures required by local and foreign governmental and other regulatory bodies for the execution of the strategic alliance in general; and the obtainment of all required approvals from local and foreign regulatory bodies in particular the EFSA, GAFI, and the Egyptian Exchange with respect to all procedures relating to the transfer of shares of Egyptian companies mentioned in resolution (2) above from EFG Hermes Holding S.A.E. to EFG Hermes Qatar LLC, including the execution of all contracts, documents, forms, as well as obtaining, signing and receiving documents and all files related to this transaction from EFSA, the Egyptian Exchange and signing all sell and buy orders or any other forms or documents necessary for the completion of this transaction vis-a-vis the Egyptian Exchange and its committees with the right to delegate others.
Moreover, the EGM authorized the Company's Board of Directors to execute any related-party contracts in connection with the strategic alliance that might be required with either QInvest LLC and/or EFG Hermes Qatar LLC.
The EGM has also delegated Mr. Ibrahim Moussa and Mr. Ahmed Abdel Karim, lawyers at the Company's legal department, to undertake all the necessary procedures required to submit and notarize the resolutions mentioned above and making any changes requested by the relevant administrative authorities, the commercial registry and EFSA.
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Votes Against all resolutions: 30,183,204 (11.52% of votes represented in EGM)
Votes Abstained: 4,106,518 (1.56% of votes represented in EGM)
The meeting concluded at 10:50 AM.
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For inquiries:
Investor Relations Contacts
Tel: +20 (0)2 35356710
Fax: +20 (0)2 3535 7017
Email: investor-relations@efg-hermes.com