Standard Chartered to sell leasing businesses to Orix

KARACHI: Standard Chartered Bank has agreed to sell its local leasing businesses to ORIX Leasing Pakistan, which will enable the nonbanking financial company to increase its penetration in the market and to embark on Islamic mode of financing, official announcements said on Wednesday.
Standard Chartered Bank (Pakistan) Limited (SCBPL) signed a sale-purchase agreement with ORIX Leasing Pakistan Limited (OLPL) in relation to divestment of its shareholdings in its various entities.
SCBPL, in a statement, said it will sell 20 percent stakes in Standard Chartered Modaraba (SCM) and 100 percent holdings in Standard Chartered Services of Pakistan (SCSP) to ORIX Leasing.
SCSP, which is private management company of SCM, holds 20 percent shares in the latter.
OLPL, in a statement, announced the amalgamation of 86.45 percent shares of the Standard Chartered Leasing (SCLL) with and into the company.
These transactions are subject to regulatory approvals, the statements said.
An official at the Standard Chartered said the sale values will be finalised at the time of transactions’ completion.
“The valuation and price payable for the shares and units, is based on the book value of the entities as at the completion date,” he said.
“Hence, the price will be finalised at the time of the completion, and adjusted depending on book value at that time."
Teizoon Kisat, chief executive ORIX Leasing Pakistan said SCM will provide the ORIX Group an opportunity to enter the country’s growing Islamic finance (Ijara) market.
“OLPL has recorded strong growth in recent years and the amalgamation of SCLL with and into OLPL will give it an access to a wider market while contributing to accelerated growth,” he said.
“OLPL will continue to expand its operations with a focus on the country’s small and medium enterprises sector.”
Established in 1987 as a perpetual modaraba, SCM is the largest modaraba in Pakistan in terms of total assets.
It primarily offers Islamic leasing and investment schemes for corporate and individuals through issuing certificate of Musharika.
The company operates in Lahore and Islamabad.
One of the country’s leading leasing companies, SCLL caters primarily to small and medium and retail customers, offering commercial and auto leasing and investment opportunities through certificate of investments.
“This transaction represents a further step in Standard Chartered’s focus on the growth of our core client businesses, including retail, corporate and institutional, commercial and Islamic banking,” said Shazad Dada, chief executive officer of SCBPL.
“Both SCLL and SCM are successful businesses in their own right and operate as entirely standalone entities.
This divestment will have no impact on SCBPL’s existing operations in Pakistan and is based on the fact that they are not aligned to our strategic objectives in the country.”