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PC receives 19 EOI for divestment of 93.88 % shares of SME Bank

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ISLAMABAD: The Privatisation Commission (“PC”) has received an overwhelming response in the shape of 19 Expressions of Interest (EOIs) from reputed Pakistani and International parties / consortia who have expressed their interest in entering the process towards acquiring 93.88% strategic shareholding in SME Bank Limited (“SME Bank”) along with transfer of management control. The last date for receiving EOIs was May 31, 2008.

Various parties included include1. Pak Kuwait Investment Company, 2. Orascom Telecom Holding SAE, 3. CitigroupVenture Capital International Investment G.P, 4. Commercial Bank of Kuwait, 5. Global Investment House K.S.C, 6. Gulf Cap FZC, 7. KASB Bank Limited, 8. Kohinoor Textile Mills and Mechantbridge Holdings S.A. Luxembourg, 9. Al Nakeel Investment LLC on behalf of Emirates Investment Group, 10. Hashwani Hotels Limited, Pakistan Services Limited, and The International Investor, Kuwait, 11. Security Investment Bank Limited, 12. Pak Libya Holding Company, 13. Pak Brunei Investment Company, 14. Associated Group, 15. Pak Steel, 16. Invest Bank, 17. Oracap Holdings, 18. Noor Financials and 19. IGI Investment Bank submitted their EOIs.

BMA Capital Management is the Financial Advisor for the transaction. SME Bank’s privatisation represents an attractive investment opportunity for investors interested in entering into the commercial banking market of Pakistan. SME Bank has an unrestricted commercial banking license covering banking activities in Pakistan. SME Bank is a public limited company, which was incorporated in Pakistan on October 30, 2001. At present, SME Bank has employee strength of approximately 630 permanent and contractual individuals and is operating through a diverse network of 27 branches, which include 13 active commercial branches.

According to JCR-VIS Credit Rating as on February 22, 2007. SME Bank was rated BBB for long-term and A-2 for short-term credits. SME Bank also holds a 73% share in SME Leasing Limited, listed on the Lahore Stock Exchange (“LSE”), which was incorporated as a wholly owned subsidiary of SME Bank. The Salient Features of the transaction include divestment of 93.88% GOP shareholding along with transfer of management control. The SME Bank has an unrestricted commercial banking license. The potential buyer will have to retain the name ‘SME Bank Ltd.’ for one-year post privatisation.

The charter of SME Bank would be maintained for three years post privatisation. All permanent employees will be offered a severance package. GOP will keep the right to appoint at least one director on the board of directors of SME Bank post privatisation. All terms and conditions relating to privatisation of SME Bank shall be communicated to all pre-qualified bidders from time to time before the bid date.-SANA

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