KARACHI: Jehangir Siddiqui Company Limited (JSCL) has planned to prop up the capital base of its subsidiary, JS Bank Limited, in a bid to meet the central bank’s minimum capital requirement, a company statement said on Monday.
In order to meet the State Bank’s minimum capital requirement for JS Bank, the parent company JSCL has decided to dispose of investment in another subsidiary, JS Global Capital Limited (JGCL).
This investment comprises 43.47 percent shares of JGCL, which will be sold to the JS Bank in exchange for the issuance of new shares of the bank. The State Bank of Pakistan (SBP) has principally approved the proposed transaction.
The transaction is subject to waiver from the Global Investment House KSC, a shareholder of JS Global in relation to their pre-emptive rights. The swap ratio for the issue of new shares of JS Bank to JSCL will be determined on the basis of break-up values of JS Global and JS Bank as on the date of the transaction.
The number of shares of JSBL to be issued in favour of JSCL and the value of discount per share of JSBL will be determined by the boards of JSCL and JS Bank, acting upon the advice of independent financial advisers.
The board of JS Bank has also approved to increase the paid-up share capital of the bank through issuance of further shares at discount, other than right shares, to JSCL and other shareholders of JS Global against acquisition of shares of JS Global.
This transaction will be subject to the approvals of the shareholders of JS Bank, JSCL, the Securities and Exchange Commission of Pakistan (SECP) and the SBP and compliance with other legal formalities, the statement added. The parent company has set the aim to sell its holdings in JS Global Capital Limited to JS Bank Limited in consideration of new shares of JS Bank to be issued to the JSCL, the statement added.