ISLAMABAD: The government has sold its 19.8 per cent stake in United Bank Ltd for $387 million, the country’s first capital market transaction in eight years, ARY News has learnt.
The deal is part of Pakistan’s initiative to privatise 68 public companies, including 10 banks, that was announced earlier this year.
The government sees the sell-off as a life saver for Pakistan’s struggling economy, crippled by power shortages, corruption and militant violence. Successful privatisation is Prime Minister Nawaz Sharif’s top political and economic goal.
“The first transaction under the privatisation commission has been overwhelmingly successful and with it Pakistan has re-entered the world equity market after eight long years,” Privatisation Commission Chairman Mohammad Zubair told Foreign media.
Foreign buyers including Morgan Stanley, Wellington, Templeton and others bought 82 percent of the stake, he said.
Pakistan hopes to raise up to $5 billion in privatisation revenue in the next two years to ease pressure on strained public finances, Zubair added.
Observers fear that an assault on Sunday on Jinnah International Airport in Karachi, Pakistan’s sprawling commercial hub of 18 million, would hamper efforts to attract foreign investors to revive economic growth.
“This active participation in United Bank’s privatisation by the world’s leading equity funds is a reflection of Pakistan’s extremely positive economic situation as perceived by these investors despite Sunday night’s terror attacks in Karachi,” Zubair said.
The International Monetary Fund saved Pakistan from possible default by agreeing last September to lend it $6.7 billion over three years, making the loan conditional on economic reforms such as a longstanding promise to privatise loss-making state companies.-Reuters