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Continuing the "Privatisation for the People" program of divestment of
shares of state-owned entities through the stock market, the government has
decided to offer 10% shares of United Bank Limited ('UBL') (with a green shoe
option of additional 5% shares) to the general public through the Karachi,
Lahore and Islamabad Stock Exchanges. Subscription for UBL shares is likely to
be called by end of May 2005. The application package for the stock exchanges
and the SECP is presently being prepared with the assistance of the Lead
Manager.
UBL, the third largest banks in Pakistan, was privatized in October 2002
through a strategic sale in which 51% (264.18 million) shares were transferred
along with management control. 25.5% (132.09 million) shares each were
acquired by the Abu Dhabi Group and the Bestway Group for a total price of
Rs.12.3 billion. The Government currently holds 49% of UBL's total 518 million
issued shares.
UBL is a highly profitable bank with a good operational record. The market
response to the share offerings of OGDCL, SSGC, PPL and KAPCO indicates that
an offer of shares of a bank like UBL would most likely receive a heavy
response from the general investors. The listing of UBL would increase market
capitalization significantly and would bring a worthwhile addition, rather a
leader, to the banking sector companies listed on the stock exchanges.
With a view to benefiting a larger cross section of the general public, shares
will be offered in lots of two hundred (200) per applicant. The large quantity
of shares offered will also add to the liquid share float in the market and
add significantly to the investor base.