Govt approves $1.2 billion HBL divestment
The government on Saturday approved divesting all of its state-owned shares in top private bank HBL for $1.2 billion that officials say is the country’s largest-ever equity offering.
The government received $1.6 billion of offers for its 41.5 per cent in HBL during three days of book-building at London, New York, Singapore and Dubai, the privatisation commission said.
“The [cabinet] committee has approved the selling of whole lot of its shares at 168 rupees a share,” Minister for Privatisation Mohammad Zubair said after the meeting.
“It was the largest-ever equity offering out of Pakistan and largest-ever equity offering in Asian frontier markets which fetched demand of $1.6 billion.” The Privatisation Commission of Pakistan said in a statement that $1.2 billion of bids were accepted of the total $1.6 billion of offers.
The government had planned to offer 250 million base shares in HBL with an option of selling 390 million more depending on the response.
A quarter was allocated for local investors with the rest to be sold internationally. Analyst Mohammad Sohail, chief of Topline Securities, lauded the approval of the deal, saying it would bring much-needed foreign currency in the country.
“Of all the shares, 75 per cent have been offered to foreign investors and it would bring $746 million to add to the foreign exchange reserves,” he said.
The chairman said with the privatization of HBL the country’s foreign exchange reserves would be strengthened resulting in further easing of inflation which would ultimately benefit the common people of the country.
Earlier during the meeting of the CCOP, its chair Finance Minister Ishaq Dar congratulated PC Chairman Mohammad Zubair, his team and advisors on their hard work to make the HBL transaction a complete success. He added that the tremendous response at home and abroad, including offering by IFC and CDC, spoke volumes of the confidence that the international financial institutions had in Pakistan’s economic standing brought about by concerted economic reforms by the PML-N government.