Pakistani property tycoon, Malik Riaz Hussain inked the sales purchases agreement (SPA) to take over Escorts Investment Bank Limited and its brokerage house at the token price of Rs. 1. This non-banking financial institute was in hot waters since 2014 and was unable to fulfill its financial obligations.
The Manager to the Offer (MTO) AKD Securities Limited made the announcement at Pakistan Stock Exchange (PSX) on Monday and disclosed the details of the Sales Purchase Agreement.
According to details in the SPA, Bahria Town agreed to take over more than 85 percent of Escorts Investment Bank shares. Bahria Town will purchase these shares in 2 different lots. It will buy 71 percent of the sponsor shares of Escorts Investment Bank at the price of Rs. 1.
“The sale and purchase of 31,385,126 Ordinary Shares representing 71.168% of the total issued share capital of the Target Company, Escorts Investment Bank Limited, at an aggregate sale price of PKR 1/- calculated at the rate of PKR 0.0000000319/- per share. The Sponsor Sellers’ shares are held in blocked Central Depository Company (CDC) accounts and will be transferred to the Bahria Town after further regulatory clearances from the regulators”, the announcement said.
Public Announcement of Offer to acquire up to 6,357,437 (14.42 percent) ordinary shares of Escorts Investment Bank Limited come at a price of Rs. 10.23 per share. These shares will be sold after voting and take over rights.
Bahria Town has adequate financial resources to fulfill the obligations under the arrangements of the Public Offer. To the satisfaction of the Manager to the Offer (AKD Securities), a cash deposit of PKR 65 million was made in an escrow account operated by the MTO.
The announcement said, “If the Acquirer fails to pay in response to the Public Offer as required under the Act and the Regulations, the Manager to the Offer can demand the amount required to make payment to the shareholders who will tender their shares in response to the Public Offer.”
The management of Escorts Investment Bank was not able to pay NBFC License fee since 2014. The bank also fails to meet the minimum equity requirement of Rs. 600 million. It has not been able to pay the outstanding amount of Rs 450 million to its depositors as well.
Accounts show that the bank also failed to pay Rs. 311 million of tax on assets and investments for its subsidiary. The total exposure of the bank in its wholly-owned subsidiary, Escorts Capital Limited, is more than Rs. 375 million.
Such an idiotic and misleading article.
All I can say, Economics and Finance should be compulsory in schools colleges…….
Agreed Rs 1 me pooora Investment ee bech dia.?
Is article ka Click Bait hony ka level hi alag hai!
I say it again, Aamir Aata only need money and he can go any down for that…
Sir, what’s factually incorrect in the article or the title?
Respond me with facts only pls.
What’s wrong is that u have written he bought investment bank for 1rs. Infact he bought each share for 1rs, not the whole bank for God sake.
All shares were purchased for Rs. 1, are you thinking that shares were purchased at Rs. 1 per share?
Itnay main tou aapko de detay bank tou acha tha, click baits se tou chhutkara mil jata.
Amir bhai…you can give example of Boeing sales @1$ ..and rest amount is price of other things into the plane… Ppl don’t understand the finance…;)
In world over, near-to-bankrupt companies are taken over for $1 or so. That is when the fledgling companies are desperate to offload assets and liabilities, get the Article-11 (insolvency) removed. An insolvent business cannot conduct business. Hence this is international practice to acquire a failed business.
People just rambled over the title. If things go in the same way, just imagine, Pakistan Steel Mill will be eyed by Malik Riaz as I see it.
Fact # 1 – Being front-man of Zardari, he gets to see much of the fortune lay ahead in Karachi
Fact #2 – Bahria Karachi is on fire. After elections it will be gearing ahead. Plus, Ali Riaz (son of Malik) has launched his own building / contracting company
Fact #3 – Through the bank, Malik will eye defaulting corporations. Zardari has feeble chance to be in power at the federal level. Thus, having a bank to front it is the best option to capitalize. Even if the bank defaults, the depositors will default. Malik won’t let this happen as his property wing is getting an extension.
Fact #4 – Karachi infrastructure will undergo upgrades, for which steel will be needed. Malik will want to profit in the future.
Interesting times ahead.
Okay…
You said he bought about 71 precent shares for 1 PKR but you also said that he will buy 14 percent shares at a higher rate than 1. So how is it possible that he bought it for PKR 1??
Also, i guess he also need to pay back all the depositors, and the loans bank aquired.
How can you mark a title such as this? Instead the should have been mention of “token money” in your article title.
Agree?
Sath SPA attach kar daitay hain bahi title main agar apka hukam ho tu…
You should, this will be a great help! I am not ordering btw, just requesting. It’s your blog, you can do what you like, we just read news here!
Please stop writing. Please let a young writer have your place. You are killing propakistani slowly but surely with your utter nonsense language.
This purchase includes the Liability of the bank which it could not clear.
How innocent? You know whats incorrect. Title states he bought Escorts Investment Bank for total of Rs1. It shows he bought the whole bank for rs1. Thats incorrect.
He bought only 71% of Escorts Investment Bank for rs1. But he will pay more then 65 million rupees to buy the rest of the shares to own the whole bank.
Now you get it or still I need to provide “facts”?
When some one acquires equity in a company then he is entitled to both assets and liabilities of that company. Therefore he is also liable to pay Rs.745 m+311m +other liability. Therefore it is not that simple.
Salman Khan,ACA
Are you kidding me ?? :/
@aamir7:disqus Then what’s this “To the satisfaction of the Manager to the Offer (AKD Securities), a cash
deposit of PKR 65 million was made in an escrow account operated by the
MTO.”
yaar mere se DUS Rupay le lo !!!!!!
What kind of an idiot wrote this. ProPakistani is losing quality
Morons come on a blog, which provides free of cost news to them and still cry that Aamir atta has made money. If these people have so many problems with this site, why dont they go and make something for others? Batain banana aasan hay par kuch karna mushkil
If You’re Not Paying For It, You Are The Product
Kiya 100 Rupee Main Share Main Khareed Sakta Ho :?
Bahria Town Main Partnership to Mill Jayegi Na ???
Wow. Poorly written article. The author is definitely loosing his credibility day by day with such lame publications. Not even a click bait article it’s just poorly worded and horribly researched
lol,, escorts what a name
lol
Assalam-O-A’alaikum to all readers. The last two paragraphs of this article solves the mystery of how can Malik Riaz buy a bank in just Rs.1. The bank is in severe losses and that is why its probably a deal of checkmate by the mutual efforts of AKD and Bahria Town. Its all because there is nothing left in that bank.
And the mystery of buying rest of the shares at Rs. 10.23/share is because those are the resources from where Malik would be earning money due the fact that these are going to be sold to people in stocks exchange.
So, its simple that the thing which has a value will be sold at a good price and the thing with no value would be either free or at a very low price…. which in that case is Rs.1 for the losses of around Rs.700 Million.
So, i think, its all clear that why would that Bank’s majority shares are going to be sold at Rs.1 in total and why the rest are going to be sold at Rs.10.23/share.
bhai kindly will you elaborate in simple wording
I was goin to offer Rs.5
BUSINESS POINT OF PROPERTY