Daily Times

KARACHI: The Privatisation Commission (PC) Tuesday invited expressions of interest (EoIs) for disinvestment of 93.88 per cent government shareholding in Small and Medium Enterprises (SME) Bank Limited along with management control.

According to a PC announcement, the early submission of EoIs would enable the interested parties to avail maximum time for the submission of statements of qualifications (SoQs). The last date to receive SoQs is March 17, 2017.

PC has invited Eol’s from reputed local and /or international investors who have an interest in entering the process towards acquiring strategic shareholding in SME Bank.

SME Bank is a public limited company, incorporated in Pakistan on October 30, 2001 and was issued Banking License on September 13, 2004 to undertake banking business in Pakistan.

At present SME Bank has an employee strength of approximately 377 permanent and contractual individuals and is operating through a network of 13 branches.

SME Bank also holds 73.1496 equity stakes in SME Leasing Limited, listed on the Pakistan Stock Exchange (PSX) which was incorporated as a wholly owned subsidiary of SME Bank in Pakistan in July 2002.

According to PC, SME Bank’s privatization represents an attractive investment opportunity for investors interested in entering the banking sector of Pakistan, since the State Bank of Pakistan (SBP) is restrictive on issuance of further banking licenses.

“The Government of Pakistan, acting through the PC, intends to proceed with the privatization of SME Bank, through divestment of up to 93.88% in the share capital of SME Bank along with transfer of management control to a qualified strategic investor”.

SBP will issue a new banking license of a specialized nature with at least 60 percent advances for SME sector to the investor with a Minimum Capital Requirement (MCR) of Rs 6 billion where Rs 2 billion would be required to be injected upfront while Rs 1 billion each year for the next four years, said PC.

SME Leasing Limited a majority of owned listed subsidiary of the SME Bank would be part of the transaction on an as-is-basis. Service matters of employees will continue to be governed by the existing terms and conditions of service.

The PC said the SME Bank can be used as a platform for delivering branchless banking/digital finance/fintech services subject to fulfillment of applicable requirements of SBP.

Furthermore, post privatization, the investor would be able to avail number of incentives offered by $89 subject to fulfillment of requisite operational requirements.

PC has appointed Financial Advisory Consortium comprising of Elixir Securities Pakistan (Private) Limited, Bridge Factor (Private) Limited (Lead Financial Advisers), KPMG (Financial/Tax Advisor) and MTC (Legal Counsel) to conduct this transaction.