Ithmaar Holding, the parent company of Faysal Bank Limited (PSX: FABL), will receive $225 million for the sale of a 75 percent stake in Ithmaar Bank (Faysal Bank JV) to Bahrain-based GFH Financial Group.
Ithmaar Holding has published minutes of its extraordinary general meeting (EOGM) on June 13, 2024. To recall, EOGM was held on May 29, 2024, with one of the agendas to discuss and approve, subject to obtaining regulatory approvals, the proposed sale and transfer of certain assets and liabilities.
For the background, 66.67 percent shares of Faysal Bank (FABL) cumulatively owned by Ithmaar Holding, Ithmaar Bank or IB Capital (together termed as Faysal Bank JV) will be transferred to an SPV. Then, 75 percent of the issued capital of that SPV will be transferred to GFH Financial Group (Notice). This translates into an indirect transfer of ~50 percent stake.
Against this stake transfer, Ithmaar Holding will receive US$225mn. This translates into a total valuation of US$ 450 million for the Bank, according to Topline Securities.
With the exchange rate of PKR/USD 279, the market value assigned to FABL bank is Rs. 126 billion or Rs. 83 per share, while the current market cap of the bank is Rs. 71 billion or Rs. 47/share.
Further, as per the minutes, the transaction is subject to the signing of definitive agreements, shareholders, and required regulatory approvals.
The current P/B of the bank is 0.78x, while the transaction rate of Rs. 83/share translates into a P/B of 1.38x.
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