KARACHI, Nov 23 Majority shareholding in Atlas Bank Limited is to pass into the hands of Suroor Investments Limited, by virtue of an agreement between the two for sale of 58.31 per cent stake held by the Atlas Group at a price of Rs4.50 per share.

Listed at the stock exchange, the Atlas Bank stock of the par value of Rs10 closed trading on Monday at over 65 per cent discounted value of Rs3.39. The buyer may purchase the minority shareholders interest also at that price, but as no one is likely to make a fortune, the news at the KSE on Monday was greeted with lukewarm interest.

But the growing interest of Suroor Investments Limited in the Pakistani “shell” banks is of profound interest. A Mauritius-based investment firm, Suroor, is believed to be controlled by a Sheikh of Dubai. Earlier this year, the foreigner had acquired 297 million shares (60 per cent) of Arif Habib Bank for Rs2.7 billion at Rs9 per share and bought over 59.34 per cent equity in loss making Mybank at Rs8 per share. The overseas investment company also holds equity interest in Dubai Islamic Bank.

A banker said that he assumed the decision by Atlas to offer itself for sale, perhaps, comes after its merger talks with Silkbank (formerly Saudi Pak Bank) in middle of the current year were put off, following the mutual consent that the initiative was unlikely to be of significance for long-term plans of the two banks.

Atlas Bank Limited itself has a history of mergers & acquisitions (M&A) activity. In 1990, Atlas Investment Bank Limited was born from the marriage of Atlas Group and the Bank of Tokyo-Mitsubishi Limited. Later in 2002, the bank merged with Atlas Lease Limited and acquired Dawood Bank Limited in December 2005.

Atlas Bank and Atlas Investment Bank joined to form Atlas Bank Limited. Its Capital Markets arm was also incorporated in 2006 and is currently a wholly owned subsidiary of the bank. In August, 2007 the bank signed an agreement with DEG - Deutsche Investitions of Germany, stated to be a leading international financial Institution.

The agreement enabled DEG to become a minority shareholder with a 24.9 per cent or 125 million shares and a seat on the bank's board. For DEG, it was the first equity investment in a commercial bank in Pakistan.

During the last reporting season, Atlas Bank announced after-tax-loss (consolidated) amounting to Rs1,488 million for the nine months to Sept 30. At that date, the bank held Rs33 billion in assets with a huge sum of Rs19 billion marked under 'advances'.

Paid-up capital stood at Rs5 billion, but almost half of it was wiped off by accumulated losses amounting to Rs2.8 billion.

The sale agreement between Atlas and Suroor unveiled on Monday was, of course, subject to necessary legal and other approvals.