Arif Habib Corp acquires 28% stake in Silkbank

Gourmet Group becomes sponsor shareholders with 12% stake

KARACHI: Arif Habib Corporation has acquired 28.23% shareholding in Silkbank, a stock filing said on Tuesday.

The conglomerate with interests in brokerage, fertiliser, cement, steel and real estate sectors has received the regulator’s approval for the acquisition of a stake in one of the smaller banks operating in Pakistan. In addition to Arif Habib Corporation, Zulqarnain Chattha and Zubair Nawaz Chattha of the Gourmet Group have also acquired a 12% stake, thus becoming ‘sponsor shareholders’ of Silkbank.



“The bank shall now proceed to issue the shares and complete the rights issue in all aspects shortly,” stated a separate statement released by Silkbank.

Silkbank had previously entered into an underwriting arrangement with the Arif Habib group as part of its capital-raising initiative through a Rs10-billion rights issue.

The rights issue by Silkbank was in response to regulatory compliance requirements because it lacked capital inadequacy.

It issued over 6.4 billion right shares at Rs1.56 per share, reflecting a discount of Rs8.44 per share. In most cases of right share issues, cash-starved companies give their existing shareholders a right to purchase newly issued shares of the company at a discount to the share price prevailing in the stock market.



Often dubbed as seasoned equity offering, right shares issues allow cash-strapped companies to raise new capital instead of borrowing from external sources.

At the end of the last year, International Finance Corporation held 26.3% shares in Silkbank while Shaukat Tarin, Nomura European Investment and Bank Muscat held 22.5%, 13.3% and 11.8%, respectively.

A Silkbank spokesman did not respond to the question about the shareholding pattern following the conclusion of the rights issue. Silkbank posted a net loss of Rs65.5 million in the first nine months of 2015 as opposed to a profit of Rs101.2 million recorded in January-September of 2014.

Published in The Express Tribune, December 9^th, 2015.

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