Noor Financial sells $16 million stake in Meezan Bank

KARACHI: Meezan Bank Limited (MEBL) on Friday reported that Kuwait-based Noor Financial Investment Company (NFIC), its bulk shareholder, had offloaded the bank’s stake worth $16.014 million.

The MEBL in a statement to Pakistan Stock Exchange said the NFIC had successfully consummated the divestment/sale of 26,447,000 ordinary shares of the bank, constituting a total of 2.49 percent of the total issued and paid up capital of bank, pursuant to which the sale shares have been acquired by various foreign institutional investors at purchase price of Rs70 per share.

Last week, the MEBL in a bourse filing had said the NFIC, having 49.11 percent shareholding in the bank, was planning to sell 9.59 percent of its 49.11 percent stake in the bank for which it had sought approval from the State Bank of Pakistan.

A total of 522.033 million shares in the bank were lying in a blocked account maintained by Central Depository Company (CDC).

The NFIC had asked the MEBL to approach the central bank to have the sales shares held in the CDC unblocked so that the company may finalise the proposed transaction.

The bank had also said the NFIC was in preliminary non-binding discussions with foreign institutional investors for a proposed divestment of 101.900 million shares, constituting 9.59 percent of the total issued and paid-up capital of the sale shares. Reuters, in a report earlier this week, quoted a source as saying that institutional investors from the United States and Europe are in talks with the NFIC to buy a combined 9.59 percent stake in MEBL from the Gulf Company.

“The investors include New York-based Ruane, Cunniff & Goldfarb, London-based RWC Partners and Swedish asset manager Tundra Fonder,” sources told Reuters.

Tundra Fonder has a Pakistan-themed fund which already holds some shares in bank. “None of the six investors would buy more than 5 percent of the lender, to facilitate a quick approval from the banking regulator,” one of the sources told newswire.

Last year Noor had said it was continuously looking for strategic alternatives for its investment in the bank.

The other major shareholders in MEBL are Islamic Development Bank and Pakistan Kuwait Investment Co.

The MEBL is Pakistan’s biggest Islamic bank with a retail banking network of more than 600 branches in more than 150 cities in the country.

Industry officials on Wednesday said the bank was planning to raise up to Rs7 billion by issuing Tier 1 Islamic bond or Sukuk in the coming few months. “The issue will be first Shariah-complaint Tier 1 Sukuk in Pakistan, while the aim for selling a Sukuk from the bank is to shore up its capital adequacy ratio,” a source, familiar with the matter, told The News.

“The bond will be issued by the way of book building, possibly in June or July. The deadline for receiving expression of interest from the investors is May 30, 2018.”

The source said the Sukuk would be a privately placed, tradable, and unlisted based on Mudarabah structure—a type of investment management partnership. “The Sukuk will be offered to selected corporate entities banks, financial institutions and pension funds etc,” the official added.

According to the bank’s annual report for 2017 the capital adequacy ratio of Meezan Bank was at 12.89 percent last year, whereas its total assets grew 19 percent to reach Rs781 billion in December 2017, compared to Rs658 billion in 2016. Noor Financial Investment Co, established in Kuwait in 1996, is engaged in investment activities and financial services primarily in Kuwait, the Middle East, Asia and other emerging markets, according to its website.