January 9, 2014 / 9:10 AM / 4 years ago

UPDATE 2-Egypt's EFG approves $144 mln share buyback plan

(Adds quotes from EFG Hermes co-CEO)

By Shaimaa Fayed and Ehab Farouk

CAIRO, Jan 9 (Reuters) - EFG Hermes, one of the largest investment banks in the Middle East, has approved a plan to buy back stock that aims to return 1 billion Egyptian pounds ($144 million) to shareholders during the first nine months of 2014.

The first phase of the programme amounts to 425 million EGP, to be executed within the next four weeks, with the second phase taking place in the late second to third quarter of 2014, EFG said in a statement.

EFG co-CEO Karim Awad told Reuters by phone said that the buyback was "an important step to achieve a better return for shareholders in light of the low share price."

While the share price has climbed steadily in recent months, it is still less than half the level of around three years ago.

"The offer will be fully funded from the company's current liquidity position," EFG's statement said.

"The start of the offer period and its duration will be subject to the receipt of approvals from the Egyptian Financial Supervisory Authority and the Egyptian Stock Exchange and will be communicated to the market as soon as possible."

Awad said that EFG hopes to receive regulatory approval over the next week.

EFG's shares rose almost 10 percent to a 14-month high of 10.27 pounds by 0845 GMT, after the announcement of the plan, against a 1.1 percent rise in Cairo's benchmark index.

The first phase of the plan will involve a buyback of 36.96 million shares, representing 6.44 percent of the firm's current outstanding shares, at 11.5 EGP per share, the statement said. The second phase will be worth 575 million pounds. (Reporting by Shaimaa Fayed; Editing by Pravin Char and Mark Potter)

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