State Bank invites proposals for sale of ABL shares

KARACHI (July 09 2003) : The State Bank of Pakistan (SBP) has invited proposals from the local and foreign financial institutions to buy majority stakes and help in the restructuring of Allied Bank Limited (ABL).

Interested parties can submit their proposals by July 17, according to a copy of the State Bank's letter sent out to banks, sources at the banking circle said.

The government owns 49-51 percent stakes in the ABL.

According to the letter, the selected investors would have to inject capital to raise ABL's equity under a restructuring plan being pursued by the government. The injection would help the investors in becoming majority shareholder in the bank.

“It is further contemplated that selected investor's contribution towards the capital will result in acquisition of a majority shareholding in the ABL,” the letter said.

The potential investors could acquire the bank in the form of a group of investors or a consortium, the letter said.

The government sold shares in bank in 1991 when its employees bought the strategic stake from the government.

The bank has a network of 825 branches and over 7,000 employees.

The text of the letter addressed to the banks, financial institutions and other entities is enclosed.

“The State Bank of Pakistan (“the State Bank”) is contemplating reconstruction of Allied Bank of Pakistan (“ABL”) pursuant to Section 47 of the Banking Companies Ordinance, 1962 (“BCO”).

“Reconstruction, if any, will provide for issuance of additional shares of ABL to a qualified investor/s who will be selected (“Selected Investor/s”) in accordance with detailed request for statement of qualifications (“RSOQ”), which the State Bank will provide to those financial institutions who (subject to the terms herein) will have expressed interest in investing and subscribing towards the capital of ABL.

It is further contemplated that Selected Investor/s' contribution towards the capital of ABL will result in acquisition of a majority shareholding in ABL.

“With a view to removing any possible doubt, it is clarified that the contemplated reconstruction will not be subject to or involve any kind of moratorium vide Section 47 (14A) of the BCO.

“Financial institutions, having requisite experience in rendering financial services, who are interested and are in a position to contribute towards the capital of ABL, as indicated above, should advise the State Bank in writing latest by Thursday the 17th July, 2003 (“letter expressing interest”). Financial institutions may participate solely or as part of a consortium, subject to prior clearance of the consortium member(s) by the State Bank.

“The letter expressing interest should contain the following particulars along with supporting documents:

a) Names and addresses of the consortium members, if any.

b) Latest audited balance sheet of the concerned financial institution, and, if a consortium, of each consortium member.

c) Confirmation from the concerned financial institution that no consortium member is on the CIB list of defaulters.

d) Net worth of the concerned financial institution, and if a consortium, of each consortium member, and

e) Any other information which is considered expedient to be stated.

“The letter expressing interest that does not satisfy the requirements, as stated above, will not be considered. The RSOQ will be dispatched to those potential investor/s who satisfy the above stated requirements and are otherwise considered by the State Bank as fit and proper.

“Further, dispatch of the RSOQ does not mean or imply that such potential investor/s have in any way been pre-qualified to acquire additional shares of ABL in the event of reconstruction. Please note that the State Bank reserves the right to change the structure of the contemplated transaction and/or to reject any letter expressing interest without assigning any reason whatsoever.”

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