UBL book-building prepared to move forward
Government to divest its residual shareholding.
More than 241.9 million shares being offered for sale are currently held by the State Bank of Pakistan (SBP) on behalf of the government. CREATIVE COMMONS
KARACHI:
An international book-building process for the divestment of the government’s shareholding in United Bank (UBL) will take place in the second week of June, Elixir Securities CEO Junaid Iqbal said on Thursday.
Speaking to The Express Tribune, Iqbal said the book-building process will kick-start on June 11 in case the final approval from the Securities and Exchange Commission of Pakistan is received within a day or two.
A consortium comprising Credit Suisse Singapore, Arif Habib Limited and Elixir Securities Pakistan has been appointed as lead manager and book runners for the transaction.
According to a notice sent to the Karachi Stock Exchange (KSE) on Thursday by the Ministry of Finance, Revenue, Economic Affairs, Statistics and Privatisation, the government will divest its residual shareholding in UBL through an offer for sale of shares to the public, including foreign and domestic investors.
The government currently owns 19.8% shares of UBL. The majority stake is controlled by Bestway Group (61.4%) while other, smaller stakeholders have 18.8% shareholding.
The government’s base offer will consist of 160 million shares representing 13.7% of the total paid-up share capital of UBL. It will also have an upsize option of up to an additional 81.9 million shares representing 6.1% of the bank’s total paid-up share capital.
The structure of the transaction has already been approved by the Cabinet Committee on Privatisation and the Privatisation Commission Board whereby the shares will be sold to successful bidders at a strike price, which will be determined on the basis of bids received through an integrated international book-building process.
It will be the first equity transaction by the Privatisation Commission in the last eight years.
More than 241.9 million shares being offered for sale are currently held by the State Bank of Pakistan (SBP) on behalf of the government.
“It’s a big transaction and we expect to receive bids from all over the world,” Iqbal said.
The share price of UBL plunged 5% – the lower limit – in Thursday’s session due to massive institutional selling. According to analysts, the expected offloading of approximately 19.8% stake by the government in the UBL stock prompted many institutional investors to sell their holdings. With the free-float of UBL expected to double going forward, many investors feared a dip in UBL’s stock price and reduced their holdings, they said.
In 2013, the latest year for which data is available, total assets, deposits and after-tax profit of UBL grew by 12.6%, 18.2% and 2.5%, respectively. Its price-to-earnings ratio stood at 8.71 at the end of 2013, which was the second-lowest among the big five commercial banks operating in Pakistan.
Published in The Express Tribune, June 6th, 2014.
An international book-building process for the divestment of the government’s shareholding in United Bank (UBL) will take place in the second week of June, Elixir Securities CEO Junaid Iqbal said on Thursday.
Speaking to The Express Tribune, Iqbal said the book-building process will kick-start on June 11 in case the final approval from the Securities and Exchange Commission of Pakistan is received within a day or two.
A consortium comprising Credit Suisse Singapore, Arif Habib Limited and Elixir Securities Pakistan has been appointed as lead manager and book runners for the transaction.
According to a notice sent to the Karachi Stock Exchange (KSE) on Thursday by the Ministry of Finance, Revenue, Economic Affairs, Statistics and Privatisation, the government will divest its residual shareholding in UBL through an offer for sale of shares to the public, including foreign and domestic investors.
The government currently owns 19.8% shares of UBL. The majority stake is controlled by Bestway Group (61.4%) while other, smaller stakeholders have 18.8% shareholding.
The government’s base offer will consist of 160 million shares representing 13.7% of the total paid-up share capital of UBL. It will also have an upsize option of up to an additional 81.9 million shares representing 6.1% of the bank’s total paid-up share capital.
The structure of the transaction has already been approved by the Cabinet Committee on Privatisation and the Privatisation Commission Board whereby the shares will be sold to successful bidders at a strike price, which will be determined on the basis of bids received through an integrated international book-building process.
It will be the first equity transaction by the Privatisation Commission in the last eight years.
More than 241.9 million shares being offered for sale are currently held by the State Bank of Pakistan (SBP) on behalf of the government.
“It’s a big transaction and we expect to receive bids from all over the world,” Iqbal said.
The share price of UBL plunged 5% – the lower limit – in Thursday’s session due to massive institutional selling. According to analysts, the expected offloading of approximately 19.8% stake by the government in the UBL stock prompted many institutional investors to sell their holdings. With the free-float of UBL expected to double going forward, many investors feared a dip in UBL’s stock price and reduced their holdings, they said.
In 2013, the latest year for which data is available, total assets, deposits and after-tax profit of UBL grew by 12.6%, 18.2% and 2.5%, respectively. Its price-to-earnings ratio stood at 8.71 at the end of 2013, which was the second-lowest among the big five commercial banks operating in Pakistan.
Published in The Express Tribune, June 6th, 2014.