BNP Paribas to take 19% stake in Sahara Bank

Dubai: BNP Paribas, is set to acquire a 19 per cent stake in Sahara Bank of Libya and will immediately take over its operational control for 145 million euros, an e-mailed statement said.

"BNP Paribas was selected as the strategic partner of Sahara Bank by the Central Bank of Libya recently. The group thus becomes the first foreign bank to develop full service banking activities in Libya, in accordance with BNP Paribas' strategy of becoming one of the top tier financial groups in the Mediterranean basin," the statement said.

According to the terms of an agreement with the government's investment holding company, BNP Paribas will acquire 19 per cent of the bank's capital and will immediately take over its operational control.

"The amount of this transaction totals 145 million euros, representing 3.6 times its current book value. Delivery of the shares will occur in mid-September following the completion of the formalities required by local stock exchange regulations," it said.

Sahara Bank is a full service bank with 1,500 employees and a market share of 17 per cent in loans and 22 per cent in deposits.

Its clients, who are served by a network of 48 branches throughout the country, include large state enterprises, as well as private companies, both Libyan and foreign owned, and over 300,000 individual and professional customers. This significant market position makes Sahara Bank an attractive vehicle for entering the Libyan banking market.

"Terms of this takeover of operational control include an option to purchase additional shares for up to 51 per cent of the capital over the next three to five years. The conditions for the purchase of the additional 32 per cent have already been established based on the price paid for the initial 19 per cent, increased by a fixed interest rate," BNP Paribas said.

This privatisation transaction is part of the Central Bank of Libya's restructuring programme for the banking industry.