KARACHI: The Bank Alfalah Limited signed with the World Bank’s International Finance Corporation (IFC) under which the latter, initially, will invest up to $67 million in the bank to subscribe to 15 percent equity stake.
It is being described as a definitive agreement for the sale of Bank Alfalah’s strategic stakes up to 20 percent.
According to a statement of the bank, the transaction is expected to close after obtaining final regulatory approvals before the end of the year.
In May, Pakistan’s central bank allowed IFC to conduct due diligence on Bank Alfalah, owned and operated by the Abu Dhabi Group.In September the bank announced that the IFC will buy 238 million shares, or 15 percent, fully paid ordinary shares at a price of Rs28/share. Bank Alfalah has also granted an option to the IFC to purchase additional equity of approximately 5.0 percent on a pro forma/pro rata basis. The option will be granted at the strike price of Rs28/share with the upper cap of Rs31/share, within the term of the option ie December 31, 2015 unless extended with mutual consent. If the market price at the time of exercise of this option is higher than Rs31, then the value in excess of the upper cap will be shared on a 50/50 basis between IFC and Bank Alfalah.
“We are delighted to have IFC as a shareholder and partner,”said Atif Bajwa, CEO Bank Alfalah. “We look forward to developing a long term strategic collaboration which will strengthen the bank’s ability to provide a wider range of services and better access to finance, and create opportunities for economic growth in the country,” he added.
The statement said Bank Alfalah has been a front runner in developing effective financial solutions for the country’s SME segment and has partnered with IFC previously to develop a comprehensive advisory package to implement its SME banking model
Dimitris Tsitsiragos, IFC Vice President for Global Client Services said the planned investment will help support Pakistan’s financial sector and demonstrate its long-term potential.
Bank Alfalah was incorporated as a public limited company on June 21, 1992 and commenced operations from November 1, 1997. It is Pakistan’s fifth-largest lender having a network of over 600 branches in more than 200 cities in Pakistan. The Bank serves more than 1 million corporate, retail, small business, agricultural, Islamic and asset financing customers.
The agreements were signed at a ceremony in Abu Dhabi attended by HH Sheikh Nahayan Bin Mubarak Al Nahayan and Bank Alfalah Chairman, HH Sheikh Hamdan Bin Mubarak Al Nahayan along with Bank Alfalah President & CEO, Atif Aslam Bajwa, members of Bank Alfalah BoD among others.
