The sale of shares of Banque Zitouna and Zitouna Takaful: A Tunisian revolution legacy

Government-owned Al Karama Holding will be selling its shares in Banque Zitouna, a fully-fledged Islamic bank, and Zitouna Takaful. The sale will be completed in the first quarter of 2018. MARC ROUSSOT brings you the story that finds its roots in the Arab Spring.

This is one of the consequences of the Jasmine Revolution. Assets confiscated by the Tunisian government after the 2011 uprising are now expected to be sold. As a result, Al Karama Holding — used by the government as a tool to hold the confiscated assets — is currently looking for potential buyers of the shares it holds in Banque Zitouna and Zitouna Takaful. These stakes had been confiscated from its funder Mohamed Sakhr El Materi, a rich businessman and the son-in-law of toppled president Zine El-Abidine Ben Ali.

“Several private groups and foreign institutional investors are interested in Banque Zitouna. Even among the current shareholders, some are showing keen interest,” Adel Grar, CEO of Al Karama Holding, says.

An invitation to tender will begin on the 14th August for investment banks that would like to advise Al Karama Holding on the sale of its shares in Banque Zitouna and Zitouna Takaful. The chosen investment bank will be designated by the 15th September and will subsequently advise on the sale of the shares in both financial institutions.

Al Karama Holding, which holds 67.11% of Banque Zitouna and 70% of Zitouna Takaful, does not plan to keep a minority shareholding in both companies. However, one of the chosen investment bank’s missions is precisely to determine what has to be sold. Also noteworthy is the fact that the 2% owned by the Tunisian government in Banque Zitouna will also be sold during the same period.

It is very likely that both financial institutions will be sold under the same tender invitation. In other words, the shares would be sold to one investor. This will be confirmed by the chosen investment bank in due course. Nevertheless, Al Karama Holding has not excluded the idea of selling 40% of Zitouna Takaful to a strategic investor and selling the remaining 30% that it owns through an IPO.

“It is difficult to say how much Al Karama Holding will earn from the sale of both entities. In the end, it will be the result of the law of market forces. Moreover, any conjecture on a particular amount would send a bad signal to the market,” explains Adel.

Al Karama Holding was known as Princesse El Materi Holding before the Tunisian Revolution. The firm was funded in 2004 by Mohamed Sakhr El Materi, a rich businessman and son-in-law of toppled president Zine el-Abidine Ben Ali. Mohamed fled the country during the revolution and all his assets were confiscated. Princesse El Materi Holding was then renamed to Al Karama Holding and used by the government as a tool to hold confiscated assets.

“Al Karama Holding’s mission is now to sell the confiscated assets in the best conditions. The Tunisian government has no plans to stay in the capital of these companies,” affirms Adel.

This article first appeared in IFN Volume 14 Issue 31 on the 2nd of August 2017

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