ISLAMABAD (December 16 2003): The Privatisation Commission (PC) has formally informed the three pre-qualified bidders that the bidding for acquisition of 51 percent stake in Habib Bank Ltd, will take place on Monday, December 29, 2003, it is reliably learnt.
The procedure laid down by PC calls for bids in sealed covers, to be opened publicly, for 51 percent shares of the bank with an option to pay either the full amount within 45 days in case of acceptance or deposit the price of 26 percent shares immediately and pay for the balance 25 percent in two years along with mark-up linked with the international rates such as LIBOR.
All bids are to be accompanied with a pay order of $10 million or equivalent in Pak rupees as earnest money.
The Aga Khan Fund for Development, Qatar Investment Fund, and the Dawood Group (Hussain Dawood) have also been asked to attend a pre-bid meeting scheduled for Monday December 22 where PC would give details to the bidders about Rs 9 billion worth of government bonds to be issued in favour of HBL.
These bonds cover a tax refund of approximately Rs 5 billion, government guarantees issued for various projects such as Saindak of around Rs 2.5 billion and loans recoverable from CIRC of around Rs 1.8 billion.
The bidders have already been told by PC that the government of Pakistan would not accept responsibility for Rs 1.8 billion in tax refund payable by Azad Kashmir Government and they can discount this amount from the valuation of the bank equity worked out by them.
It is learnt that when a bid is accepted the successful bidder will be obliged to submit a funding plan to the State Bank of Pakistan for approval. And, once SBP approves the plan it will assist the successful bidder to obtain approvals from overseas regulators such in the 26 countries where the HBL branches operate, such as Financial Supervisory Agency (UK), Federal Reserve Bank and SEC, New York and UAE Central Bank, etc.
PC has allowed 45 days after acceptance of the bid for documentation and necessary approvals prior to handing over the management of HBL to the private sector buyer.
All the three bidders have already held detailed meetings with the relevant quarters in the officialdom and the message received by them in clear terms is: “we have no favourites, whoever comes with a bid close to or above the valuation submitted by the financial advisor to the transaction (A.F. Ferguson & Co) and approved by the Cabinet Committee on Privatisation (CCOP) is welcome to take over HBL”.
