Indonesian financial services firm PT MNC Kapital has acquired Beltone Financial’s majority stake in New York-based brokerage Auerbach Grayson, MNC said in a statement (pdf) yesterday. Beltone has remained tightlipped on the identity of the buyer, saying only that a group of investors had agreed to purchase its 60% stake in the brokerage. MNC is partnering with Auerbach co-founder David Grayson on the acquisition, who MNC said bought back the remaining shares in the brokerage firm, without disclosing how ownership will be distributed. The sale and purchase agreement has been finalized after earning approval from the US Financial Industry Regulatory Authority last week.Beltone hopes to wave goodbye to a sea of red: The firm is offloading its stake following a string of losses since its purchase in 2016. Beltone CEO Ibrahim Karam said last year that the brokerage was responsible for “big” losses at the company, whose finances have remained in the red since 2018. Beltone reported a EGP 35.9 mn loss in the first nine months of 2020, an improvement on the EGP 63.3 mn loss in the same period the previous year.About MNC Kapital: The company is owned by Indian businessman and politician Hary Tanoesoedibjo, who Reuters notes is a business partner of outgoing US President Donald Trump. MNC Kapital, a subsidiary of MNC Group, was set up as the holding company’s financial services arm in 1999 before going public in 2001.

Beltone Financial Holding will set up three new non-banking financial companies in September in a bid to return to profitability, CEO Ibrahim Karam said in an interview with Reuters on Tuesday. Beltone will set up a financial leasing company targeting a first-year portfolio of EGP 600 mn, a consumer finance company with a first-year portfolio of EGP 400 mn, and a venture capital subsidiary, he said. The investment bank has already locked down the licenses for these subsidiaries. Beltone had said in January it expects non-banking financial services to contribute 30-40% of its revenue over the next three years. “The new companies, along with strengthening existing activities, will help us return to profit in 2021,” Karam said. Beltone is still waiting on US regulators to approve the sale of its 60% stake in New York-based brokerage Auerbach Grayson. “We are waiting for the regulatory authorities there to approve it, but we have concluded an agreement with a buyer and signed contracts,” Karam told the newswire without disclosing the identity of the buyers, adding only that they were not a GCC-based institution. The investment bank announced in April that it had completed the sale to a group of investors, pending regulatory approval. Beltone has been on a loss-making streak that is on its way to last three years, last reporting a profit in 1Q2018. The company announced improved figures in 2Q2020, reporting a EGP 12 mn loss from the EGP 34 mn loss made in 2019.

M&A WATCH- Beltone Financial is waiting on US regulatory approval to complete the sale of its 60% stake in New York-based brokerage Auerbach Grayson, according to a bourse filing (pdf). Beltone signed the stake over to an unnamed group of investors in April and expected the regulatory approvals to be completed within three months. The filing mentioned that the postponement is due to “current circumstances,” which we’re taking as a reference to covid-19. In other company news, Beltone expects to launch its consumer finance arm within a “few weeks,” Shehab Marzban, the newly appointed CEO of Beltone’s VC arm, told Al Mal. The new company, named Bel Cash, is expected to be up and running as soon as Beltone completes a few remaining steps and the Financial Regulatory Authority gives the all-clear. Beltone submitted a request to the authority to obtain the license earlier this week, it said in a regulatory filing (pdf).

M&A WATCH- Beltone to complete sale of Auerbach Grayson in three months: Beltone Financial Holding is expecting to wrap up the sale of its 60% stake in New York-based brokerage Auerbach Grayson in the next three months, provided the “current situation” doesn’t disrupt proceedings, the investment bank said in a regulatory filing (pdf). Beltone announced last week that it had agreed to offload its stake to an unnamed group of investors and that the transaction would be finalized after getting approval from US regulators. Due diligence has not yet been completed and the company has not yet reached an agreement on valuation, according to the statement. Background: Beltone announced its intention to offload its majority stake in Auerbach Grayson earlier this year, citing “large losses” it had incurred since purchasing the stake in 2016. The move is part of a strategy to focus on investment banking and expand its non-banking financial services businesses in Egypt and neighboring markets.

M&A WATCH- Beltone Financial sells US subsidiary Auerbach Grayson: Beltone Financial Holding has completed the sale of its 60% stake in New York-based brokerage Auerbach Grayson to an unnamed group of investors, the company said in a statement (pdf) on Thursday. The investment bank said the sale will be finalized once it secures approval from the US’ Financial Industry Regulatory Authority. The move is part of Beltone’s strategy to restructure with a focus on investment banking and expanding its non-banking financial services in Egypt and neighboring markets, the statement said. Background: Beltone announced its intention to offload its majority stake in Auerbach Grayson earlier this year, citing “large losses” it had incurred since purchasing the stake in 2016.

The Financial Regulatory Authority (FRA) has approved Beltone Financial’s planned capital increase to EGP 898 mn from EGP 338 mn through a rights issue of 280 mn shares at EGP 2 apiece, according to a FRA disclosure to the EGX (pdf). The capital increase will allow Beltone to pay off the EGP 392 mn loan it had taken from Orascom Investment Holding to finance its 2016 acquisition of New York-based brokerage Auerbach Grayson.