MCB Bank Ltd, the second largest listed bank at the Karachi Stock Exchange (KSE) has planned to sell global depository receipts in the range of $100 million to $150 million, utilising funds for acquisition and gaining international recognition. The bank has appointed Merrill Lynch and KASB to help sell global depository receipts at the overseas market.
According to the experts depending upon the demand and pricing, the lender would sell GDRs soon aimed to utilise these funds for acquisition. Moreover, this would help gain recognition among the international investors, building a strong base for the group. It would help the group to sell more GDRs in future in other associated companies.
MCB Bank, first bank in the country is contemplating raising fresh equity capital in the form of GDRs, to be listed at the London Stock Exchange. A consortium of Merrill Lynch and KASB has been mandated to place the issue with institutional and retail investors outside Pakistan.
MCB Bank with an asset base of $5 billion and deposit base of over $3.8 billion. With a market capitalisation of over $1.7 billion. MCB Bank is one of the mostly actively traded stocks.
According to an analyst several investors heard rumours about floatation of GDRs by the MCB Bank since the last couple of weeks and despite the downturn at the stock market on several occasions, the lender received support from financial institutions and high net worth investors.
The MCB Bank for the last four consecutive sessions has either closed at the upper circuit or near to the upper level, with heavy volumes. The share price during Tuesday's trading climbed by Rs 9.45 to Rs 213.45 on a brisk business of 17.989 million shares.
"Based on its market position, potential for growth, profitability and management quality, MCB has been receiving the Euro money Award for Excellence for the "Best Bank in Pakistan" for five out of the past six years.
Since its privatisation in 1991, MCB's major shareholder has been the Nishat Group, the largest and one of the oldest business conglomerates in Pakistan, having substantial interests in cement, textiles, finance and insurance. MCB has been an active contributor and beneficiary of the economic and social development of the Pakistani nation. Its 9,000 employees operate through a network of 946 branches, servicing of institutional banking clients and 4.1 million account holders.
The capital of MCB Bank is around Rs 5.2 billion and funds raised through this GDRs would used as tier 1 capital and would be convertible into shares, after passing through primary resolution at general body meeting. Last year, Dr Mohmmad Taccob, former governor of State Bank of Pakistan has been elected as one of the board directors of the lender and would head the audit committee.
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