Privatisation Commission: Too low a floor as CCoP says Rs166 per share for HBL

[xiaahmad]

Share price of HBL offered by PMLN gov is Rs. 166

Privatisation Commission: Too low a floor as CCoP says Rs166 per share for HBL




Government set to offer its 41.5% stake in bank; book building to begin today. CREATIVE COMMONS

ISLAMABAD:
In a surprising move, the Cabinet Committee on Privatisation (CCoP) on Monday set the floor price at just Rs166 per share for offloading its remaining 41.5% stake in the country’s largest financial institution, the Habib Bank Limited (HBL).


When compared with the price range recommended by the Privatization Commission (PC) Board, the CCOP’s decision would cause a potential loss of up to Rs14.6 billion to the exchequer, as the Rs166 share price will fetch only Rs101.1 billion. The cabinet body’s meeting was chaired by Minister for Finance and Privatisation Ishaq Dar.


The CCOP’s determined minimum price was far lower than the price range of Rs170 to Rs190 per share, which was worked out by the PC’s board. Financial advisors had recommended Rs160 per share price, which the board termed low given the nature of the transaction, said a senior official of the PC.


He said the financial advisors ignored the strength of the company and benefits the buyers of these shares will receive. After the transaction, the free float of HBL will increase from the present 7.5% to 49%.


The government has hired a consortium of financial advisors comprising Credit Suisse, Deutsche Bank, Elixir Securities and Arif Habib Limited.


At the price of Rs170, the government’s earnings would have amounted to Rs103.5 billion, while at Rs190 these were estimated at Rs115.7 billion.


Out of the 609 million shares on offer, which represent 41.5% of the government’s stake in HBL, 250 million are base shares. The other 359 million will be available once 250 million shares are fully subscribed by the investors. The book building will begin today (Tuesday) and will continue till April 10.


The State Bank of Pakistan has waived off the restriction of holding only up to 5% of the total stakes aimed at facilitating big investors. Still, the success of the transaction will depend whether the International Finance Corporation of the World Bank Group, Commonwealth Development Corporation (CDC) and Agha Khan Fund for Economic Development take part in the bidding.


During the PC’s meetings with the potential investors, foreign investors like Everest Capital, Prusik Investment Fund, CDC, and Capital R showed their intentions to buy shares at Rs170 per share. Investors usually remain conservative in their meetings aimed at getting lucrative deals. Some domestic institutions valued their shares up to Rs180.


The CCOP’s price was even lower than Monday’s trading price of Rs185.62 and also lower than the 52-week lowest of Rs169.4 per share.


Given the financial strength of HBL, the government needed to adopt an aggressive marketing strategy, said an equity market analyst who is also involved in policymaking in one of the three stock markets.


He said instead of giving discount, the government should have set the floor price at a 5% premium of last day’s trading. The analyst was of the view that the government determined the floor price keeping in mind the book value of the HBL.


The weighted average price of last one month was Rs189.16 per share, which was fully reflected in the PC Board decision but ignored by the CCOP. The weighted average price of last two months was Rs195.53 per share and of last three months it was Rs201.55 per share.


The government’s ability in achieving the budgetary target of roughly $2 billion hinges on successful completion of the HBL transaction, which is expected to generate 60% of the total budgetary target.


It will be the fourth capital market transaction since June last year. The government has already divested its shares in Allied Bank Limited, Pakistan Petroleum Limited and United Bank Limited, earning Rs68 billion in the process.


Published in The Express Tribune, April 7th, 2015.

http://tribune.com.pk/story/865574/...a-floor-as-ccop-says-rs166-per-share-for-hbl/

Market Price of HBL share is Rs. 188-190 and just in FEB it was Rs. 215

http://www.moneyhub.net/scripts/cgiip.wsc/globalone/htm/quote_and_news.r?pisharetype-id=251305

SO THIS IS CORRUPTION OF BILLIONS by NAWAZ GOV

 

[xiaahmad]

who will buy the share Mansha?

 

[amir_ali]

Check the dates:

[h=1]Government gets $1.2 billion offers for HBL shares[/h]


KARACHI: The federal government has had offers of more than $1.2 billion for its remaining stake in the country’s largest private bank HBL, exceeding expectations, a minister said Friday.
The deal to offload the goverment’s 41.5 per cent share in HBL, likely to be approved on Saturday, would be the country’s largest privatisation deal in the past decade.
HBL, formerly known as Habib Bank Limited, was part-privatised in 2003, with the Agha Khan Foundation buying the bulk of the shares.
The government’s Privatisation Commission recommended divesting the remaining shares earlier this year and offerings were made at stock markets in London, New York, Singapore and Dubai.
Read: HBL profit rises 38% in 2014
“This is an absolutely outstanding response from international investors and it was beyond our expectations,” Mohammad Zubair, Minister for Privatisation told AFP by telephone from London.
The government had planned to offer 250 million base shares, with an option of selling 390 million more depending on the response.
The minister said the cabinet committee on privatisation would meet to approve the share price and green-shoe sale on Saturday in Islamabad.
Analyst Mohammad Sohail, the head of Topline Securities, said he was surprised by the level of international interest.
Read: Sell-off: Privatisation Commission approves sale of remaining 41.5% shares in HBL
“The offers are quite astounding and that shows that international investors are keen to invest in Pakistan – not only in the stock market but other sectors as well,” he told AFP.
HBL, which opened in 1947, has 1,425 branches in Pakistan. Its foreign network is spread over 26 countries.
http://tribune.com.pk/story/867664/government-gets-1-2-billion-offers-for-hbl-shares/

 

[Khuram Shehzad Jafri]

There is huge difference between Bank Al Habib and Habib Bank Limited

Your displaying the picture of Bank Al Habib, which has never been in govt control. Habib bank was nationalized under Bhutto era.

and Agha khan fund has already more than 51% stake in Habib bank , I don't know govt is selling whole 41.5% stake , and the price for management stake should not be as normal public offered share.

 

[arafay]

so how much did agha khan pay sharif for this favor?

 

[xiaahmad]

HBL most profitable Bank to be sold by PMLN

HBL most profitable Bank in Pakistan to be sold by PMLN

Why?
Actual share price 180 and they r selling at 166

 

[ShrartiMunda]

Re: HBL most profitable Bank to be sold by PMLN

Lagta hai kalo bhai nai NA 246 mai chutiyon ka makoo thup dia hai . Abb pichwary ki aag bhujanay kai liay thread per thread khol rahay hain .