Ithmaar Holding, the parent company of Faysal Bank Limited (PSX: FABL) held its EOGM on Wednesday to get approval from its shareholders for the proposed sale and transfer of certain assets, whereby Bahrain-based GFH Financial Group will acquire a 75 percent stake in Ithmaar Bank (Faysal Bank JV).
The company has managed to get its shareholders’ approval for the proposed sale and transfer of certain assets worth US$ 695-715 million and liabilities of around US$ 665- 695 million, Topline Securities said in a brief note.
A 66.67 percent stake in Faysal Bank will initially be transferred to a company entirely owned by Ithmaar Holding, Ithmaar Bank, or IB Capital (together termed as Faysal Bank JV), subject to local regulatory approval. Post this, 75 percent of the issued capital of Faysal Bank JV shall be transferred to GFH Financial Group.
GFH shall receive a yearly preferred return of 12 percent ROE on a cumulative accrual basis for a period of 5 years. It has yet to be seen whether this will result in a uniform payout policy of Faysal Bank or if this pertains to something else.
The transfer of shareholding first to Faysal Bank JV is to facilitate the execution of this transaction smoothly without bringing/taking dollars inside/outside Pakistan. Ithmaar Holding is indirectly selling Faysal Bank shares by selling its stake in Faysal Bank JV.
On May 25, 2024, Ithmaar also sold a 5.76 percent stake in Faisal Islamic Bank of Egypt to an unknown buyer against a consideration of US$ 34.8 million. This takes the total Egypt Bank value to US$ 604 million, suggesting a P/B of approximately 1.0x.
FABL is currently trading at a P/B of 0.74x.
GFH is a Bahrain-based financial investment group and its various communication exchanges have also highlighted their discussions to acquire Ithmaar’s Financing and Investment Portfolios.
At the time of filing, FABL’s scrip at the bourse was Rs. 42.05, down 3.44 percent or Rs. 1.5 with 1.9 million shares on Thursday.
