KARACHI, Oct 20: Hussain Lawai, the erstwhile banker is back into banking. A consortium of foreign and local investors, led by Mr Lawai has expressed interest in acquisition of “substantial shareholding” in Arif Habib Bank Limited (AHBL).
A Memorandum of Understanding (MoU) was signed on Oct 18 between Hussain Lawai Consortium and Arif Habib Securities Limited, the holding company of AHBL. That was understood to be as a prelude to the negotiations and formalisation of the material terms and fulfillment of all other regulatory requirements.
Informed sources said that following the disinvestment and public offer of shares in the AHBL a year ago, the equity interest of AHSL in the bank had diluted to 59.6 per cent, from 89.11 per cent. The acquisition model provides that either the Hussain Lawai Consortium would buyout the shares of existing shareholders or inject additional equity into the bank, thought to be around Rs4.5 billion, to be able to command the controlling shares of over 50 per cent in the bank.
A tender offer could also be made to the public for purchase of their holdings, at the same price as would be offered to the majority shareholder.
Neither the bank, nor its holding company disclosed the price per share at which the stocks would change hands, but AHSL said on Monday: “Once, the proposal is firmed up into a concluded contract, full details will be provided to the SECP and the KSE”.
The Arif Habib Bank was born through the acquisition of Pakistan operations of the Rupali Bank Limited of Bangladesh. AHBL started operations on Aug 5, 2006 and sought listing at the stock exchanges on Feb 11 of the current year. For FY07, the bank had made profit after tax amounting to Rs230 million.
On March 31, this year, the paid-up capital of AHBL stood at Rs4.5 billion and including reserves of Rs2 billion, the bank carried Rs6.5 billion in equity on its balance sheet. The bank had a network of 12 branches.Mr Arif Habib, the stock broker like many of his peers, diversified into banking, to mutual funds, to industry, mainly in the past few years of stock market boom. He could not be reached on Monday to ascertain whether his interest in banking had waned or he wished to deploy assets in other current or conceived ventures.In 1990, following the acquisition of Muslim Commercial Bank Limited (MCBL) by the tycoon Mian Mansha who chaired the Board, Mr Lawai was appointed the President and CEO of the bank, which then ranked the third largest in the country.
As the buyout deal between AHSL and the consortium goes through, Hussain Lawai, would have stepped into the country’s banking sector after a break of many years of his migration abroad.