Silk Bank BoD de­cides to ex­er­cise call op­tion

The Pak Banker - - FRONT PAGE -

KARACHI: The board of di­rec­tors of Silk Bank has given a green sig­nal to bank's man­age­ment for ex­er­cise of the Call Op­tion in re­spect of 880 mil­lion Non-cu­mu­la­tive Con­vert­ible Pref­er­ence Shares (PNCPS) to stream­line its share­hold­ing. The de­ci­sion was taken in an emer­gent meet­ing of the Board of Di­rec­tors of the Silk­bank held on Wed­nes­day. The board ap­proved the ex­er­cise of the Call Op­tion by the Bank in re­spect of the Non-cu­mu­la­tive Con­vert­ible Pref­er­ence Shares ("PNCPS") is­sued in 2013 and passed the res­o­lu­tions which in­clud­ing can­cel­la­tion of the 1,028,710,173 un­sub­scribed rights of 311.00226 per­cent.

Ac­cord­ing to res­o­lu­tion passed by board in ac­cor­dance with the List­ing Regulation No. 35 un­der the Code of Cor­po­rate Gov­er­nance - 2012, the board ap­proved that "Rights Is­sue of the bank, an­nounced in the year 2010, be and is hereby ap­proved.

The board em­pow­ered Pres­i­dent and CEO of the bank and the Com­pany Sec­re­tary of the bank, be and are hereby au­tho­rized, to take all steps nec­es­sary, an­cil­lary and in­ci­den­tal for ex­cis­ing call op­tion for PNCPS and re­sul­tant can­cel­la­tion of the un­sub­scribed rights, in­clud­ing but not lim­ited to ob­tain­ing all req­ui­site reg­u­la­tory ap­provals and sub­mit­ting all such doc­u­ments as may be re­quired by the reg­u­la­tors, ex­e­cut­ing all such cer­tifi­cates, ap­pli­ca­tions, no­tices, re­ports, let­ters and any other doc­u­ment or in­stru­ment in­clud­ing any amend­ments or sub­sti­tu­tions to any of the fore­go­ing as may be re­quired and all other mat­ters in­ci­den­tal or an­cil­lary thereto.

Last month,t he man­age­ment of Silk Bank has con­cluded its right share ex­er­cise to gen­er­ate re­quired paid up cap­i­tal with fi­nal sub­scrip­tion of spon­sor in­vestors and gen­eral pub­lic. The bank re­ceived sub­scrip­tion of 4.3 mil­lion right shares which at­tract Rs 6.8 bil­lion which in­clud­ing Rs 0.5 bil­lion stakes of gen­eral pub­lic; Rs 1.05 bil­lion by Zuliqer­nain Nawaz Chatta; Rs 0.648 bil­lion by Zubair Nawaz Chatta; Rs 1.095 bil­lion by Shaukat Tarain; and Rs 3.99 bil­lion by Arif Habib Cor­po­ra­tion as un­der­writer spon­sor. Af­ter go-ahead sig­nal of cen­tral bank in June 2015, Silk Bank floated Rs 6.14 bil­lion rights right shares against the value of Rs 1.56 per share which is dis­counted price of Rs 8.44 per share.

In July, the bank was pro­vided fi­nan­cial sup­ported by Arif Habib as un­der­writer to an ex­tent of Rs 6 bil­lion which means ex­pect­edly fi­nanc­ing has been in­creased in the bank by in­vestors, re­sult­ing of paid-up cap­i­tal en­hance­ment to Rs 16 bil­lion. Later, the un­der­writ­ers M/s. Arif Habib Lim­ited sub­scribed the re­main­ing/ un­sub­scribed por­tion of the Rights Is­sue as per the Un­der­writ­ing Agree­ment. Ac­cord­ing to the five year strate­gic fi­nan­cial plan sub­mit­ted to the cen­tral bank, the bank has made pro­jec­tions for its prof­itabil­ity and busi­ness ex­pan­sion in the fu­ture. The board of di­rec­tors has planned to en­hance its prof­itabil­ity by Rs 4.8 bil­lion with twofold in­crease in the as­sets and ex­pan­sion of busi­ness op­er­a­tions by next five years from 2015. The bank man­age­ment will set up its branches' net­work which will in­clude con­ven­tional and Is­lamic bank­ing , Emaan but th­ese branches will be es­tab­lished com­par­a­tively in small size than op­er­at­ing branches in dif­fer­ent cities. Due to short­fall in the paid-up cap­i­tal, the bank is not al­lowed to set up its branches and new prod­ucts but now it will set to grow its busi­ness with an ag­gres­sive busi­ness strat­egy.

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