Crédit Agricole Corporate & Investment Bank is selling a 4.9% stake in Banque Saudi Fransi to a consortium led by U.S.-based Ripplewood Advisors LLC, subject to regulatory approvals.
The stake is being sold at a price of 31.5 Saudi riyals per share, for a total consideration of about 1.86 billion Saudi riyals, or roughly €440 million. The buyers include Olayan Saudi Investment Co. Ltd., which is acquiring a 1.9% stake in Banque Saudi Fransi, and Ripplewood investment vehicle RAM Holdings I Ltd., which is acquiring a 3% stake.
Crédit Agricole CIB will be left with a 10% ownership in Banque Saudi Fransi. The transaction is expected to complete during the coming weeks.
Ripplewood can buy an additional 6% stake in Banque Saudi Fransi at a price of 30 riyals per share as part of the deal, for a total consideration of approximately 2.17 billion Saudi riyals, or about €510 million. This would generate an accounting loss of about €100 million, depending on the bank's share price at the time of issuance.
The right to buy the additional stake is valid before the end of December. Should Ripplewood exercise the option, the sale will have a positive effect in excess of 15 basis points on the fully loaded common equity Tier 1 ratio of Crédit Agricole SA and of more than 10 basis points on the fully loaded CET1 ratio of Crédit Agricole Group, compared to the values at the end of December 2018.
As of March 15, US$1 was equivalent to 3.75 Saudi riyals.