Faysal Bank: Parent’s strategic stake sale decision gets shareholders’ approval

KARACHI: Ithmaar Holding, the parent company of Faysal Bank Pakistan held its EOGM to get approval of its shareholders for proposed sale and transfer of certain assets.

The company has managed to get its shareholders’ approval for the proposed sale and transfer of certain assets, approximately $695-715 million and liabilities, $665-695 million.

The abovementioned agenda included following among others;

Faysal Bank Pakistan: As many as 66.67 percent stake of Faysal Bank will initially be transferred to a company entirely owned by Ithmaar Holding, Ithmaar Bank or IB Capital (together termed as Faysal Bank JV), subject to local regulatory approval.

Post this, 75 percent of the issued capital of Faysal Bank JV shall be transferred to GFH Financial Group.

GFH shall receive yearly preferred return of 12 percent RoE on a cumulative accrual basis for a period of 5 years. “We await further clarity on this clause to see whether this will result in uniform payout policy of Faysal bank or if this pertains to something else,” an analyst at Topline Securities said.

“In our view, transfer of shareholding first to Faysal Bank JV is to facilitate the execution of this transaction smoothly without bringing/taking dollars inside/outside Pakistan,” analyst said.

Ithmaar Holding is indirectly selling Faysal Bank shares by selling its stake in Faysal Bank JV.

On May 25, 2024, Ithmaar has also sold 5.76 percent stake in Faisal Islamic Bank of Egypt to an unknown buyer against consideration of $34.8 million. This takes total Egypt Bank value to $604 million, suggesting P/B of approximately 1.0x. While, Faysal bank is currently trading at P/B of 0.74x.

GFH is also a Bahrain-based financial investment group and its various communication to exchange they have also highlighted about their discussions to acquire Ithmaar’s Financing and Investment Portfolios.

Copyright Business Recorder, 2024