Wednesday, January 28, 2004
By Javed Mahmood
ISLAMABAD: The Aga Khan Fund for Economic Development (AKFED) will pay Rs 11 billion, or 52% of the bid price, soon after Eid-ul-Azha as the first instalment to acquire management control of Habib Bank Limited (HBL) while the rest of the amount will be paid within the next two years, a senior official of the Privatisation Commission said here Tuesday.
After the first instalment, the remaining amount of Rs 11.409 billion, or 51.85 percent, will be paid by the AKFED in two years along with a certain amount of mutually agreed mark-up, he added.
The official said it had been mentioned in the AKFED bid, approved by the Cabinet Committee on Privatisation (CCOP), that the fund would pay a first tranche of Rs 11 billion to take management control of the bank.
AKFED was declared the highest bidder on December 29 when it offered Rs 22.409 billion, or $389 million, for acquiring 51 percent shares of HBL along with management control.
The official said that a ceremony would be held in Islamabad soon after Eid to hand over HBL control to the fund.
Two bidders - Aga Khan Fund for Economic Development and Qatar Supreme Council for Economic Affairs (QSCEA) - participated in HBL’s bidding.
The QSCEA offered Rs 21.993 billion, against Rs 22.409 billion offered by the AKFED.
The Privatisation Commission has already issued a letter of acceptance (LOA) in favour of the AKFED, meeting a legal requirement of accepting the bid.
The official also said that with the transfer of HBL to the Fund, the share of private sector in the banking sector would increase to 80 percent. At present the HBL has about 19 percent shares in the banking sector in the country, he added.
He said under existing rules, the AKFED cannot terminate any employee for a period of one year, but it can only offer a voluntary separation scheme. But after one year the new management can fire any official, he added.