ISLAMABAD: Finance Minister Ishaq Dar, on Monday, directed the Privatization Commission (PC) to ensure transparency in disinvestment of Government’s shares in Habib Bank Limited (HBL).
HBL with a network of over 1500 branches and over 1000 ATMs in the country and 55 branches worldwide, has a domestic market share of over 40%. It continues to dominate the commercial banking sector with a major market share in inward foreign remittances (55%) and loans to small industries, traders and farmers.
A well placed source at Finance Ministry told this scribe here on Monday that Finance Minister while chairing the meeting of Cabinet Committee on Privatization directed all the concerned institutions to remain vigilant during the disinvestment of GoP shares of the HBL so that any anomaly could be averted well in time prior to the completion of privatization process.
After detailed deliberations, CCOP approved the floor price of Rs.166 per share for divestment of Government of Pakistan’s (GoP’s) residual shares in HBL with base size of 250 million shares.
According to the approved Offer for Sale Document (OFSD), the offer of HBL share is being made only through the book building method to the eligible international and domestic institutional investors and high-net worth individual investors (HNWI).
Chairman Privatization Commission Mohmmad Zubair informed the minister that the commission would focus on divestment of government’s shares in HBL besides some other SoEs.
Dar was further informed that the book building would start at 0900 hrs (PST) on today (Tuesday) and conclude at 1700 hrs (PST) on Friday April 10, 2015 and The PC Board and CCoP would meet on Saturday April 11, 2015 to approve the strike price based on the final results of the book building process
Mohammad Zubair observed that in its meeting Monday morning the PC Board considered the HBL pricing benchmarks, demand of investors at various price levels and other influencing factors as presented by the Financial Advisors and made its recommendations for the price at which GoP shares in HBL were to be offered.
Information Minister, Pervaiz Rashid, Federal Minister for Planning and Development, Ahsan Iqbal, Federal Minister for Petroleum & Natural Resources, Shahid Khaqan Abbasy, Commerce Minister, Khurram Dastgir, Minister for Port & Shipping, Kamran Michael, Chairman PC, Mohammad Zubair, Chairman Board of Investment, Miftah Ismail, Secretary Finance, Dr. Waqar Masood, Advisor Finance Division, Rana Assad Amin, Chairman SECP Zafar ul Haq Hijazi and other senior officials from various ministries attended the meeting.
The Government expected proceed of about $ 600 million dollars out of selling a stake in Habib Bank Ltd (HBL), The government owns 609 million shares of Habib Bank, or a 42%t stake, and it will offer a minimum of 250 million shares
Privatization process kicked off earnest after the creation of Privatization Commission on January 22, 1991. Although the PC mandate initially restricted to industrial transactions, by 1993 it had expanded to also include Power, Oil & Gas, Transport (aviation, railways, ports and shipping), Telecommunications and Banking and Insurance. During January 1991 to December, 2014 the Commission completed 170 transactions for Rs 544.090 billion.
To date, PC has completed or approved 170 transactions at gross sale price of Rs 544.090 billion. About 59% of the proceeds received were transferred to the Federal Government, 34% was returned to legal entities whose shares were sold, 5% was used for restructuring expenses associated largely with golden handshakes and rehabilitation, and 2% was used for PC’s privatization-related expenditures.
While almost all the transactions were settled in local currency, about 66.3% of the proceeds have been received in foreign exchange from transactions pertaining to Kot Addu Power Plant (KAPCO), Oil & Gas Concessions, Habib Credit & Exchange Bank, United Bank Limited, Habib Bank Limited, KESC, PTCL, OGDCL and UBL.
PC has announced that the Habib Bank Limited (HBL) shares being offered pursuant to the proposed domestic and international offerings, have not been and will not be registered under the US Securities Act of 1933 or any US state securities laws, or qualified for distribution under the securities laws of Australia, Canada.
