Orix Leasing to divest stake in Oman-based firm

KARACHI: Orix Leasing Pakistan planned to divest its stake in an Oman-based Oman Orix Leasing Company for estimated capital gains of Rs400 million, a bourse filing said on Tuesday.

A notice to Pakistan Stock Exchange said Orix Leasing Pakistan Limited planned to sell its strategic investment in Oman Orix Leasing Company to National Finance Company SAOG (NFC) Oman for which the company expects to book capital gains of Rs400 million.

Orix Leasing Pakistan holds 30.39 million shares in Oman Orix Leasing Company SAOG (OOLC), which called a shareholders’ meeting on December 13 in Muscat for considering and approving a scheme of merger of OOLC with and into NFC.

An equity analyst said the additional flows will lend further strength to the company’s funding position in the upcoming financial year.

In the proposed scheme of merger, the shareholders of OOLC have been given the option to either accept shares in NFC at a swap ratio of 1:1 in exchanging for their shares in OOLC or receive a cash payment equivalent to 1.2 times book value per shares of OOLC as at December 31.

The merger is subject to approval of shareholders of OOLC and NFC and regulatory approvals without which the merger may not take place. The Orix Leasing’s board recommended that OLP should opt for NFC’s cash offer subject to the merger of OOLC and NFC being approved by their shareholders and regulators.

The amount to be received by OLP is contingent on the future book value of OLC as at December 31.

“Barring any unforeseen future circumstances which may affect OOLC’s final book value per share as at December 31, Orix Leasing Pakistan estimates that it will book a gain of approximately Rs400 million after tax on the transaction,” the PSX notice added.

Orix board’s recommendation is also subject to approval from the shareholders and approval for the disinvestment of strategic investment by the Securities and Exchange Commission of Pakistan.

Orix Leasing said positive macroeconomic indicators spurred by China-Pakistan Economic Corridor would have a knock-on growth effect on the small and medium enterprise, transportation, construction and steel sectors and the leasing industry.

“Initiatives that have been taken within the company to prepare for upcoming opportunities are expected to yield good results in future, though competitive threats may have an impact,” Orix Leasing said in a report.