Kuwait-based Gulf Investment Corp (GIC) will sell its 72.45 per cent stake in Gulf International Bank (GIB) to the Gulf Cooperation Council (GCC) states. GIC is equally owned by all six GCC countries.

The equity sale, based on the book value as of December 31, 2000, will be partly settled through the offset of retained earnings of GIC. The balance will be paid by GIC shareholders (GCC states), GIC said yesterday.

It said the sale, agreed upon at an April 7 meeting of the GIC board, will enable GIC to focus on its core activities. The corporation did not put a value to the deal nor did it reveal the individual shareholdings of each GCC state or the retained earnings.

However, Reuters said the GIC stake in GIB could be worth $877 million. It named other shareholders in GIB as the Saudi Arabian Monetary Agency (Sama) with 22.2 per cent and J.P. Morgan with 5.3 per cent. The remaining equity of 0.05 per cent was not identified.

"This transaction is a successful culmination of the corporation's strategy of investing, developing and exiting from its direct investments once its objectives are met and as new opportunities arise," said Dr. Ibrahim Al Assaf, Saudi Minister of Finance and National Economy and GIC chairman, in a statement released to Gulf News.

Al Assaf also announced that GIC will now be headed by Hisham Razzuqi as chief executive officer and general manager. GIC's board also approved a strategy study developed by consultants McKinsey & Co.

"We are confident that with the implementation of the proposed new strategy, GIC will be better equipped to take advantage of the new investment opportunities that arise in the region as a result of efforts by GCC governments to restructure their economies to enhance the role of the private sector and to encourage foreign investments and technology transfer," Al Assaf said.