Govt generates Rs14.4b by divesting ABL shares

Society Pakistan & World Affairs
1

**Another successful transaction … next year PSM , PIA , HEC , LESCO & FESCO will be divested

Govt generates Rs14.4b by divesting ABL shares**

December 13, 2014
[RIGHT]
[/RIGHT]

**
ISLAMABAD -** The PML-N government has completed the process of divesting its shares of Allied Bank of Pakistan (ABL), which generated Rs 14.4 billion for the national kitty including $32 million foreign buying.

The Cabinet Committee on Privatisation (CCOP), which met under the chair of Finance Minister Senator Ishaq Dar on Friday, unanimously approved strike price of Rs. 110/- per share for divestment of GoP residual shares in Allied Bank Ltd. and also allocation of shares to successful bidders.

**The government has received overwhelming response from the investors as against the total of 131 million shares were offered for the divestment in the stock market, the orders for 185 million shares have been placed.

**
Earlier PC Board in its meeting held on December 11, 2014 recommended the ‘Strike Price of Rs.110/- and allocation of GOP Shares to the successful bidders as specified in the Offer for Sale Document (OFSD). The CCOP consequently considered the recommendations of the PC Board early Friday and approved the ‘Strike Price’.

Minister of State/Chairman Privatisation Commission Mohammad Zubair informed the CCoP meeting that there has been a fine mix of local and foreign exchange component in the orders placed for shares. Against the strike price of Rs.110 the orders placed are worth Rs 14.4 billion inclusive of $32 million foreign exchange component. There has been encouraging response from home and abroad and the transaction has been completed in a record 19 working days, Zubair added.

He further said that strike price of Rs.110 per share translates into a discount of only Rs.2.76 per share to the closing price of Rs.112.76 on December 11, 2014, i.e. a minimal discount of 2.76pc to the closing price on December 11, 2014. This is one of the lowest discounts offered for similar transactions anywhere in Asia over the last several years, Zubair remarked.

Finance Minister Ishaq Dar chaired the meeting on video link from Lahore which was attended by Khurram Dastgir, Minister for Commerce, Pervaiz Rashid, Information Minister, Chairman Privatization Commission, Muhammad Zubair, Secretary Privatisation Commission, Ahmad Nawaz Sukhera, Secretary Finance, Later, addressing a press conference, Minister of State for Privatisation Mohammad Zubair termed the bank’s shares transaction a major success of the government. “The government had now left zero shares in ABL”,

Giving details of the transaction, Zubair informed, “Foreign investors spent $32 million on bidding of 13 percent of total shares of ABL which showed their confidence in the stable economy of Pakistan”. He further said that Privatisation Commission extended date for appointment of Financial Advisor (FA) for strategic sale of Pakistan Steel Mills on the request of some consortiums.

He further said that strategic sale of State Owned Enterprises in active list of privatisation was a tricky business but process has been initiated and some of them would be put on sale in mid of 2015.

2

Re: Govt generates Rs14.4b by divesting ABL shares

Government to go ahead with sale of SOEs despite political turmoil

By Kazim Alam
Published: December 9, 2014

http://i1.tribune.com.pk/wp-content/uploads/2014/12/803727-save-1418070095-673-640x480.jpg

The government is offering its residual shareholding of approximately 11.5% in ABL through privatisation. ILLUSTRATION: JAMAL KHURSHID

KARACHI: **The government is determined to hold the strategic sale of loss-making state-owned enterprises (SOEs) despite escalating political turmoil, Privatisation Commission Chairman Mohammad Zubair said on Monday.

**
Speaking at a road show organised in connection with the offer for sale of government’s stake in Allied Bank Limited (ABL), Zubair said international banks and funds were eager to invest in Pakistan after the successful transactions of United Bank (UBL) and Pakistan Petroleum (PPL).

http://i1.tribune.com.pk/wp-content/uploads/2014/12/Rs116.53.jpg

Referring to a meeting he held with Prime Minister Nawaz Sharif in mid-September, Zubair said the premier was committed to selling entities like Pakistan Steel and Pakistan International Airlines in spite of mounting opposition from anti-privatisation lobbies.

“We can’t even transfer employees in these organisations,” he said while referring to the government’s helplessness in dealing with vested interests in SOEs. He added a turnaround under government ownership was impossible in entities like PIA and Pakistan Steel.

Referring to the reconstruction of ABL’s capital in 2004 whereby the Ibrahim Group took over the bank’s control, Zubair said its privatisation had benefitted its employees, banking sector and consumers of banking services alike.

The government is offering its residual shareholding of approximately 11.5% in ABL through privatisation. The offer for sale of shares consists of 131.2 million ordinary shares, which will be extended to high net worth individuals and institutional investors through a book-building process on December 10-11.

The floor price, which is the lowest price any eligible investor can bid at, is going to be at a premium to the par value of Rs10 per share and will be notified on Tuesday.

However, the strike price will be calculated through the Dutch Auction Method, which will determine the maximum price at which all shares that are up for grabs are fully subscribed.

Unlike past transactions that allowed the minimum bid amount of Rs 1 million, it will be Rs500,000 for ABL’s shares. This is being done to attract more retail investors, according to Elixir Securities Head of Corporate Finance Babur Rais.

http://i1.tribune.com.pk/wp-content/uploads/2014/12/The-government.jpg

Rais said the post-transaction free-float of ABL would increase to approximately 20% from 9%. Currently, 63.4% shares of the bank are held by its directors. Ibrahim Fibres, which is owned by the majority shareholders of ABL, owns another 16.9% stake.

The State Bank of Pakistan (SBP) and the federal government own shareholdings of 10% and 1.4%, respectively. This represents the offer for the present sale of shares in ABL.

The share price of ABL stood at Rs 116.53 at the end of trading on Monday after increasing by Rs1.58. The transaction is going to be worth around Rs13.1 billion at current prices, according to Topline Securities.

**
ABL is one of the top five banks in terms of market capitalisation, loans and deposits. Its net profit for the first nine months of 2014 was Rs 11.5 billion, which makes it the fifth most profitable bank operating in Pakistan.**

Its non-performing loans (NPLs) ratio at the end of the third quarter of 2014 was 7.7% as opposed to 13% for the entire banking sector.

Topline Securities said with four new public offerings in December, the number of total public offerings during the current year will reach 10 as opposed to only three in 2013.

“This number is good compared to the last five-year average annual offerings of around three. But it is still less than (the average of) 30 offerings a year in the 1990s,” it said.
*

Published in The Express Tribune, December 9[SUP]th[/SUP], 2014.*

3

Re: Govt generates Rs14.4b by divesting ABL shares

govt maiey dollaron k peechey par gai hey :aj:

imran khan sahib lahore mein kashto k pushtey laga do :hbk:
qadm barho pahlwan khan hum tumharay sath hein :cobra:

4

Re: Govt generates Rs14.4b by divesting ABL shares

Wonder how much of this will end up in the foreign accounts of raiwind waley. Knowing their corruption at least 99%

5

Re: Govt generates Rs14.4b by divesting ABL shares

China to Train ‘50-Cent Army’ in Online Propaganda

6

Re: Govt generates Rs14.4b by divesting ABL shares

A good 20 to 30% atleast. The same amount that was taken out by Musharraf, by Zardari and everybody else in politics.