- CCoP, PC’s Board approves divestment of its residual shareholding in ABL
- Upcoming investor road-shows coinciding with PTI’s agitation
The ongoing political uncertainty might impact the risk-averse investors’ sentiments adversely as the federal government announced to have secured the nod of the Cabinet Committee on Privatization (CCoP) and the Board of Privatization Commission (PC) for divesting its residual shares in the Allied Bank Limited (ABL).
In a perfect world, however, the offer would fetch for the resource-constrained government more than $ 144 million, said a source at one of the three lead managers of the transaction.
The Ministry of Finance, through notification number CM/ABL/PC/2014, informed the general managers of the country’s three stocks exchanges in Karachi, Lahore and Islamabad last Friday about the approval the two bodies had accorded to the government’s divestment plan.
“The CCoP and the PC board, in its meeting held on November 26, considered and approved the divestment of its residual shareholding in ABL,” reads the notification that the Karachi Stock Exchange (KSE) made public Monday.
The funds-starved PML-N led government has put to offer over 131.27 million shares that represent 11.46 percent of the bank’s total paid up share capital.
The CCoP and the PC’s Board, the ministry said, had approved the structure of the transaction whereby the shares would be sold to successful bidders at a strike price to be determined via the Dutch Auction Method on the basis of bids received.
The KSE’s book building system would be used for the two-day book building process.
According to a source at one of the three book runners, investors were taking keen interest in the equities of ABL. Even if sold at the current market price of the bank’s shares, Rs 113.17 on Monday, the transaction would earn for the government more than $ 144.58 or Rs 14.85 billion, the source added. “The price discovery should be better as ABL is one of the country’s five largest banks,” he viewed.
Of the total shares offered, around 115.26 million (10.06 percent) are held by the State Bank of Pakistan (SBP) and the balance 16 million (1.40 percent) are with the federal government, the Finance Ministry added.
The finance division also has directed the central bank, through a letter, to make arrangements for the transfer of saleable shares as a consequence of transaction.
For the transaction to materialise, the federal government has appointed a three-member consortium, comprising Elixir Securities, AKD Securities and MCB Bank Limited, as lead manager and book runners.
The book runners have planned holding road shows in all major cities of the country, especially Lahore Islamabad and Karachi. The first two shows are slated for the 11th and 12th of December, said the source.
“The road-shows are coinciding with PTI’s showdown in Lahore on Dec 4,” said the source.
This political uncertainty, the source apprehended, would certainly have its impact on the investors’ sentiments.
