Dubai Bank PJSC wants to sell its shareholding in BankIslami Pakistan, a report in the local media said on Thursday.
According to the report, Jahangir Siddiqui and Company which also has shares in the bank, reported that it has received a letter from the UAE-based bank, saying it wants to sell 144.2 million shares in BankIslami Pakistan. The stake that Dubai Bank PJSC wants to sell constitutes 14.3% of the total issued shares of BankIslami Pakistan.
According to the report, Dubai Bank is offering its stake to Jahangir Siddiqui and Company and another (unnamed) shareholder of BankIslami Pakistan under its shareholders’ agreement that mandates a right of first refusal on a proportionate basis. However, Jahangir Siddiqui and Company said the final decision on the offer will be taken by its board of directors.
With a stake of 25%, Dubai Bank was the largest shareholder in BankIslami until the end of 2014. It was followed by Jahangir Siddiqui and Company (21.2%), and two individuals with a stake of 9.8% each.
However, BankIslami Pakistan conducted its right shares issue recently that increased its shareholders’ equity to Rs 9.9 billion on April 30 to meet the central bank’s capital adequacy requirements. It is unclear if Dubai Bank subscribed to the newly issued right shares. The website of BankIslami Pakistan still shows Dubai Bank as its single largest shareholder though.
Dubai Bank was acquired by Emirates NBD in October 2011. The acquisition of Dubai Bank granted Emirates NBD a 24.8% stake in BankIslami Pakistan through Dubai Bank. It was decided in April 2012 that Dubai Bank will merge with Emirates Islamic Bank and this amalgamation is currently under progress.
At the current share price of BankIslami Pakistan, the proposed deal is worth in excess of Rs1.75 billion, although the parties involved are not bound to strike the deal at the market price, said the report appearing in the Express Tribune.
