RenCap Hires Banker From CI Capital as It Opens Doors in Egypt

CAIRO (Capital Markets in Africa) – Renaissance Capital, the investment bank controlled by Russian billionaire Mikhail Prokhorov, is hiring investment bankers and analysts in Egypt as more vibrant capital markets attract financial services firms to the country.

Mohamed Younis will be chief executive officer of the investment bank in Egypt, said Ahmed Badr, RenCap’s CEO for the Middle East and North Africa. Younis, previously at CI Capital Holding, an arm of Commercial International Bank Egypt SAE, will report to Badr, who will be chairman of the board, and to James Friel, global head of investment banking based in London.

RenCap is seeking to profit from a pickup in trading sparked in November, when authorities removed almost all restrictions on the Egyptian pound to help end a shortage of hard currency and clinch a $12 billion International Monetary Fund loan. Since then, inflows to the country’s stock market and government bonds have surged and at least six companies plan IPOs by the end of 2018, following two sales since January, according to data compiled by Bloomberg.

“We are in the business of raising capital, and there are a lot of companies in need to raise capital at the moment,” Badr said Monday in an interview in Dubai. “There is a ton of IPOs that are being lined up and we think that the market, from an advisory perspective, is actually under served, especially on the debt side. RenCap has a strong distribution platform that is going to a market that is hungry for capital raising.”

Deals, New Hires
The firm is already working with “several” companies planning to raise debt in dollars, with one expected to sell notes in the next three months, Badr said. RenCap has been mandated to work on an IPO set for pricing in the third quarter of 2018. The firm is also in conversation with Egyptian companies targeting merger and acquisition opportunities outside the country, mostly in eastern Africa, he said.

“International banks tend to look for deals with an average ticket size between $200 million and $500 million, and that is scarce in Egypt now,” Badr said. The average deal size in Egypt is between $30 million and $100 million. “You can reach $150 million maximum in some deals.”

The Egyptian unit of RenCap was incorporated last week as Renaissance Capital Egypt SAE and expects to receive its investment banking license from the local regulator in the next four to six weeks, Badr said.

The firm is in discussions to hire four investment bankers and potentially four analysts for its Egyptian team. Mohamed Zein, RenCap’s Dubai-based head of consumer research, will relocate to Cairo, where he will keep the same position. The research team will initially focus on Egyptian companies, with the potential to expand coverage beyond the country, he said.

Abdalla El Ebiary, chairman of the Egyptian Private Equity association, and Amr Helal, head of corporate private equity at Capstone Group and formerly of the Abraaj Group, will serve as non-executive members of the bank’s board.

RenCap doesn’t intend to apply for a brokerage license, a market that’s already saturated, said Badr. The bank will continue to work with local brokers to execute trades, also ruling out acquisitions in the country.

Source: Bloomberg Business News