A customer changes money at a UAE Exchange branch. Most of the company's branches have been closed since March last year after the Central Bank of the UAE stepped in to oversee its operations. Pawan Singh / The National
A customer changes money at a UAE Exchange branch. Most of the company's branches have been closed since March last year after the Central Bank of the UAE stepped in to oversee its operations. Pawan Singh / The National
A customer changes money at a UAE Exchange branch. Most of the company's branches have been closed since March last year after the Central Bank of the UAE stepped in to oversee its operations. Pawan Singh / The National
A customer changes money at a UAE Exchange branch. Most of the company's branches have been closed since March last year after the Central Bank of the UAE stepped in to oversee its operations. Pawan S

Markets

Consortium bidding for Finablr in merger talks with Bahrain's BFC Group

Combining the two entities would create an organisation with licences to operate in 30 countries

Michael Fahy
Michael Fahy

February 24, 2021

  • English
  • Arabic

The consortium bidding for Finablr said it is in advanced talks with Bahrain's BFC Group Holdings to acquire the company and merge the two groups.

Switzerland's Prism and Abu Dhabi's Royal Strategic Partners said that talks with the century-old BFC are at an advanced stage and are due to complete in the second quarter of this year. If successful, the combined organisation would hold licences to operate in 30 countries, serving 24 million customers.

“We are confident of the deal concluding and excited about taking a major step towards creating a market-leading, pan-global financial services company in the region," Prism Group chief executive Amir Nagammy said in a statement.

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BFC Group was founded as Bahrain Financing Company in 1917, initially trading in gold bullion but moving into the remittance markets in the 1970s. It was later bought by Islamic lender Bank Alkhair and its operations expanded into the UK, Kuwait and India.

“I am excited by the opportunities a merger would create,” BFC Group chief executive, Ebrahim Nonoo, said. “Our combined retail network will be the largest in the Gulf and the consortium has the expertise, experience and vision needed to build a 21st Century payments infrastructure that will benefit millions of customers.”

Prism and RSP's bid for Finablr, the heavily-indebted foreign exchange group previously owned by BR Shetty, was first announced in October last year.

Finablr floated in April 2019 in a deal that valued it at £1.23 billion ($1.66bn), but its shares were suspended in March 2020 after the UAE Central Bank moved in to undertake direct supervision of its UAE Exchange business. In May, the group said investigators uncovered previously unreported debts of about $1bn, sparking a restructuring that led to its Travelex subsidiary being taken over by its lenders.

Prism and RSP will pay a nominal $1 for Finablr, whose remaining brands include UAE Exchange, Unimoni, Xpress Money and Remit2India. It will also pay 25 per cent of funds recovered from "third parties in respect of possible historic wrongdoing" at the company, up to a maximum of $190 million.

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Tearful appearance

Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday. 

Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow. 

She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.

A spokesman said her upset demeanour was due to a personal matter.

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