Oman International Bank (OIB), which has announced a merger plan with HSBC Oman, proposes to either sell or close down its overseas branches in India and Pakistan. The bank will seek permission from its shareholders for the same at an extraordinary general meeting (EGM) scheduled for May 9. OIB has five overseas branches — three in Pakistan and two in India.
The extraordinary general meeting will also consider a board proposal to issue 1.02 billion ordinary shares in the bank to HSBC Bank Middle East Limited in consideration of HSBC Oman being merged by incorporation into the bank. The total issued and fully paid capital of the bank will consist of two billion shares of 100 baisas each with 51 per cent of the total shares held by HSBC Bank Middle East Limited. Under the terms of the merger, HSBC will inject an additional capital of up to $97.4 million in cash from its internal resources into HSBC Oman and the business of HSBC Oman will then be merged with OIB, HSBC said in a press statement, after announcing the merger plan. The company is also seeking an approval from shareholders for increasing the authorised capital of the bank from RO100 million to RO750 million (divided into 7.5 billion shares of 100 baisas each), subject to completion of the merger.
Other agendas of the EGM include a plan to enter into the services agreement with HSBC Bank Middle East Limited and to enter into the branding agreement with HSBC Holdings plc — both to become effective on completion of the merger. The HSBC Group will provide certain support services to HSBC Bank Oman under a services agreement with an initial term of ten years, according to the press release. The board is also seeking shareholders’ approval for changing of the name of the bank to HSBC Bank Oman SAOG, subject to completion of the merger.