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Foreign sponsor plans to quit ICI Pakistan

June 12, 2012

KARACHI: Three local companies — Lucky Cement, Nishat Mills and Fajr Capital — announced on Monday that they intended to carry out due diligence process to evaluate and assess the viability of a potential acquisition of 76.81 per cent shares in ICI Pakistan Limited.

They stood among the short-listed potential acquirers and have been invited to the due diligence process.

Major shareholder of ICI Pak Ltd is ICI Omicron, B.V, a subsidiary of AkzoNobel N.V, which holds total number of 92 million or 75.81 per cent of the issued shares in ICI. The due diligence process would take place under the Listed Companies (Substantial Acquisitions of Voting Shares and Take-over) Ordinance, 2002 and the Regulations 2008.

Lucky Cement announced on Monday that it intended to acquire 70 million shares or 75.81 per cent of total paid-up capital of target company from its principal overseas shareholder.

Nishat Mills Limited also notified its intention to target ICI Pak, for acquisition of equal number of shares, which would ultimately be held by ICI Omicron B.V, after giving effect to the ongoing company reconstruction recently approved by the Sindh High Court.

The Nishat Group is on the whole represented by various individuals and group companies.

The third contender to the proposed acquisition was identified as Fajr Capital which together with ICORP (private) Ltd intended to seek 87.9 per cent shares of target company, pursuant to an agreement to be negotiated and entered into among the relevant parties.

The acquirers observed that in the event of success, the number/percentage (of shares) may change at the time of public announcement of the offer. Fajr Capital Limted is incorporated under the laws of the Dubai International Financial Centre and based in Dubai, UAE. A total of six entities have been listed as major shareholders in the company, which is chaired by Adib AlZamil. ICORP (Pvt) Ltd on the other hand, is the local company owned by certain employees of ICI Pak.

In ICORP (Pvt) Ltd, seven persons are identified as major shareholders. They are currently employees (including senior management) of ICI Pak Ltd and own 100 per cent of ICORP.

Following public announcement of participating in the employee buyout of ICI Pakistan through ICORP, more employees who desire to participate could become shareholders in ICORP.

If the acquirers proceed to get the target shares, they would make a public announcement of Offer to acquire shares in accordance with the requirements of the Regulations. Earlier this month, ICI Pak Ltd had announced that the High Court of Sindh on May 17 had sanctioned the Scheme of Arrangement for reconstruction of the company, which in accordance with the terms became operative on June 1.

This related to the ICI Pakistan’s decision to spin off the paints business from the company and vest into another company, Akzo Nobel Pakistan Limited, which would be listed on the three stock exchanges in Pakistan. Subsequently to the approval of the transfer of Paints undertaking of ICI to Akzo Nobel Pakistan Ltd, ICI Pak Ltd would re-emerge with reduced capital. Few would have, however, suspected that the foreign sponsor was contemplating divesting its ownership of other businesses as well, and leave.