International Herald Tribune
Tuesday, December 30, 2003
The Geneva-based Aga Khan Fund for Economic Development, which invests in companies in developing countries and already owns Soneri Bank of Pakistan, topped an offer made by the State of Qatar Supreme Council for Economic Affairs and Investment at an auction on Monday, said Abdul Hafeez Shaikh, the asset-sale minister.
The bidding process "was fair and transparent," said Iain Cheyne, a director of Aga Khan Fund, in Islamabad. Qatar Supreme Council bid 21.9 billion rupees for Habib Bank.
Pakistan is looking to the sale of state assets to help repay $35 billion of foreign currency debt, equivalent to about half of the country's gross domestic product. The privatization program is also part of a commitment to the International Monetary Fund, made in return for a $1.3 billion loan that was approved in December 2001.
The sale of Habib Bank, if completed, would be the biggest sale of a government asset to a single investor. In 1994, Pakistan sold 12 percent of Pakistan Telecommunication on the stock market to raise about $700 million.
. The bid by the Aga Khan Fund met the government's minimum expectations, Shaikh said. A cabinet committee on asset sales will decide within two weeks whether to accept or reject the bid. Central Insurance Co., a Taiwan company that had been shortlisted for the sale, did not submit a bit.
"It is a success for the government as it got a good bid price and a foreign investor," said Mohammad Sohail, head of research at Investcapital Securities, in Karachi. "This will help improve foreign investment" in Pakistan.
This month, the government said it would raise 9.8 billion rupees by selling bonds to repay its debt to Karachi- based Habib Bank.
The spiritual leader of the Shia Imami Ismaili Muslim community and revered as a direct descendent of the prophet Mohammed, the Aga Khan has channeled millions of dollars into poor communities, mostly in regions where Ismailis live in Africa and the Middle East.
The for-profit Aga Khan Fund invests in more than 90 companies with assets of more than $1 billion spanning 15 countries, according to the Web site of the Aga Khan Development Network.