The International Finance Corporation (IFC) with a group of international investors is planning to launch a regional investment and merchant bank that will initially focus on developing business in the Levant. The bank will have capital of $30 million, with the founding shareholders taking a 50.3 per cent stake and the remainder offered to other mainly Middle East investors between now and the end of 1995. The bank will be based offshore in the Channel Islands, although the first Middle East office will open in Beirut.
The founding shareholders, who will put up capital of $15.1 million, are the IFC with 10 per cent, BZW, the investment arm of Barclays, and National Commercial Bank each with 16.7 per cent and then three individual Lebanese investors who will together hold 7 per cent. BZW and NCB have both approved the plans, but the IFC still has to present the proposals before the board of directors.
The three individuals will form the top management of the new venture. Nabeel Sawabini, formerly with JP Morgan in New York, will become the chief executive officer. The two managing directors will be Safi Harb, who previously worked for IFC capital markets, and Jamil Jarudi, formerly with the corporate and project finance department in Saudi Arabia’s Al- Mawarid Group.
Several leading Middle East industrial groups have expressed an interest in providing the remaining capital. The interested parties will be sent an offering memo before the end of October. The deal is expected to be finalised in December.
The bank is aimed to deepen the Middle East’s capital markets, including promoting and developing a secondary market for corporate and government securities, underwriting equity and bond issues and making private equity investment in private companies going public. It also plans to offer advice on privatisation issues.
The first office in Beirut will initially focus on deals in Lebanon, Syria, Jordan and Gaza and the West Bank. Within six-12 months of starting up, an office in Jordan is planned to open. However, the bank will also target other Middle East markets in the Gulf and North Africa.
The IFC has been involved in several similar projects in the region, including setting up a leasing company in Beirut in co-operation with Fransabank and establishing a bank in the occupied territories.