KARACHI: Silk Bank has entered into an underwriting arrangement with Arif Habib Limited as part of its capital-raising initiative through the recently announced Rs10-billion rights issue.
According to a statement issued by the bank, this will provide Silk Bank with substantial capital adequacy to pursue long-term growth objectives besides ensuring regulatory compliance.
The rights issue is expected to be completed in the next 45 days, the statement added.
The State Bank of Pakistan (SBP) has given final approval to Silk Bank for the issuance of right shares.
The bank will issue 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.
Silk Bank has already received Rs2 billion as advance against shares in the subscription account, assuring the completion of the issue and increasing the capital base of the bank to Rs16 billion.
The SBP had given an exemption to Silk Bank to meet the minimum capital requirement (Rs10 billion) and capital adequacy ratio - 10% of the bank's risk-weighted credit exposures - until June 30.
Published in The Express Tribune, July 1st, 2015.
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