In a highly successful equity offering, the Government of Pakistan raised
proceeds of approximately US$ 650.3 million from the sale of shares overseas
in United Bank Limited (UBL) through a Global Depository Receipt (GDR)
offering after the UBL management successfully completed a roadshow
encompassing global financial centers including Hong Kong, Singapore, London,
Dubai and New York. Mr. Zahid Hamid Federal Minister for Privatisation &
Investment explained details of the transaction while giving a press briefing
to a large number of the representatives of print and electronic media
regarding the decisions of the Cabinet Committee on Privatisation, which met
here today under the chairmanship of Prime Minister Mr. Shaukat Aziz.
The Minister said that the UBL GDR would start conditional trading on the London Stock Exchange (LSE) from June 25, 2007 while full trading would start from June 29, 2007. This launch has marked another landmark transaction of the privatisation program of Pakistan in the international market after the listing of OGDCL at LSE in December last year, which attracted US $ 811 million, he said.
Mr. Zahid Hamid added that international investors from US, UK, continental Europe, Middle East and Asia bought GDRs equivalent to UBL shares priced at Rs.195/- apiece, amounting to divestment of a 25 percent of the total paid up capital of UBL. Each GDR represents four underlying shares of UBL. The GDRs were priced at US$ 12.8543 each. The transaction attracted gross demand of over US$ 2.5 bn from a mix of to quality global funds, Asian funds and financial sector dedicated specialists, the largest ever book for a Pakistan equity offering.
The GDR was attractively priced at approximately 5.0x ’06 price to book value per share, which is higher than the valuation of similar transactions elsewhere/ globally.
The offer price represents a premium of 2.6 percent to the average price of the 30days price, a premium of 9.2 percent to the 60 days price and a discount of about 5.3 percent to Friday’s (Yesterday) local closing price of Rs. 206/- per share. Importantly, this successful out come was achieved against the positive backdrop of the share price increasing 67.8 percent year-to date and 26.4 % since transaction kick off on March 30, he added.
Merrill Lynch was sole Bookrunner on the transaction with KASB Securities acting as Financial Advisors, the transaction was completed in 11 weeks from kick-off.
Giving details of the CCOP approval regarding Habib Bank Limited (HBL) Initial Public Offering (IPO), the Minister stated that the PC was offering 5% shares of HBL with a green shoe option of 2.5% in total share offering of 51. 75m shares. At an offer price per share of Rs 235/-, the total size of the offering is Rs.12.2 billion.
Habib Bank Limited (HBL) offer for sale by shares held by Government of Pakistan by the Privatisation Commission to the small investors/ common citizens of Pakistan will be the largest offering in Pakistan in terms of both value and number of shares offered.
Keeping in view the objective of the government’s “Privatisation for the People” program, in perspective for the first time ever shares are being offered in lots of 100 and multiples of 100 upto 500 shares, thereafter multiples of 500 shares. The marketable lot for trading in the Stock Exchanges will be 100 shares, allowing ease of entry and exit to successful applicants of 100 shares. The application size of 100 shares would make the subscription affordable for the common citizens and would allow them an opportunity to become a shareholder of one of the largest banks of Pakistan. This structure will potentially benefit over 517,000 investors, the largest number ever in such transactions.
HBL is the largest bank in Pakistan in terms of branch network and advances. The Bank has 1437 branches in Pakistan and 40 branches overseas in 26 countries. It is the only Pakistan based bank to have diversified international operations.
The public offering of HBL shares is expected over next 2-3 weeks. Global Securities is the Lead Manager for the Transaction.
The Minister further said that the CCOP was also apprised of the suggestions and proposals came out of the deliberations of the pre-qualified bidders during the pre-bid conference of PSO transaction and said that all stakeholders have been asked to expedite the resolution of all the issues in this regard.