A Lahore-based group of investors has decided to buyback 9% shares of Network Microfinance Bank from the public, according to a notice sent to the Karachi Stock Exchange on Friday.
The group already has a share purchase agreement with majority shareholders Jahangir Siddiqui and Company and KASB Bank to buy 82% shares of the microfinance bank. The transaction is expected to be around Rs166 million as Rs6.75 was paid per share for 24,604,382 shares.
The 9% stake will mean the group will have to take out another Rs19 million from its pocket to buy the shares held by the general public, assuming all current shareholders sell their shares.
The group comprises seven investors include two executives from agricultural input makers Auriga Group, chairman of United Insurance Company and former Askari Bank’s head of commercial banking, says the notice.
Agricultural inputs maker Auriga Group showed interest in June to acquire Network Microfinance Bank in order to expand its business by extending loans to farmers. The move will allow Auriga Group to access various refinancing schemes of the central bank and other multinational donors, according to media reports.
Network Microfinance Bank has been supported by the Pakistan Poverty Alleviation Fund under the aegis of the World Bank through a credit line of Rs225 million. The bank, first microfinance bank to be listed at the country’s stock exchange, share price rose Rs0.02 to close at Rs5.7 during trade at the Karachi Stock Exchange on Friday.
The group says in a statement that the bank will primarily focus on providing financial services to farmers and agriculture market by structuring lending products which caters to the agriculture sector. Moreover, the bank will provide micro financing facilities to small sized businesses and individuals.
Published in The Express Tribune, October 22nd, 2011.
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