The government has successfully divested the 42 per cent shares of the Habib Bank Limited (HBL), which will raise $1.06 billion for the national kitty that would be enhance the country’s foreign exchange reserves.

“HBL privatization is the largest ever equity offering out of Pakistan and largest ever equity offering in Asian Frontier markets which fetched demand of 1.6 billion dollars,” Minister of State/Chairman Privatization Commission Mohammad Zubair said in a press conference here.  The demand was generated for 979 million shares versus total offer size of 609 million shares. The current offering is the largest privatization deal since 2006, when the then government raised $813 million from selling its stake in Oil and Gas Development (OGDCL) and $898 million from privatization of PTCL.

Giving break-up of $1.6 billion total demand, he informed that record foreign demand of $1.2 billion with 45 investors participating and unprecedented domestic demand of Rs 45 billion with over 480 investors participating were received. However $ 1.06 billion were accepted (foreign exchange USD764 million and PKR24,567 million), he added.

Minister of State further informed that Cabinet Committee on Privatization, in its meeting chaired by Finance Minister Ishaq Dar on Saturday, approved strike price of Rs 168 per share for divestment of 609 million GoP residual shares in HBL, as recommended by the Privatization Commission Board.  Mohammad Zubair said that government held road shows for divesting HBL shares in ten international cities including Dubai, Hong Kong, Boston, New York and others. During the road shows, good news regarding Pakistan’s economy came from Moody’s international and International Monetary Fund, which pushed the investors to buy HBL’s shares. He further said that country’s foreign exchange reserves would increase with inflow of $764 million as foreign exchange out of total $1.06 billion.

  The government has divested its shares of the third bank in last ten months, as it already completed the transactions of Allied Bank of Pakistan (ABL) in December last year that generated Rs 14.4 billion and United Bank Limited (UBL) in June 2014 that fetched $387 million for the national kitty. Apart from the banks, the government also privatized the Heavy Electrical Complex (HEC) during the last week of March for Rs.905 million. The government had also divested the shares of Pakistan Petroleum Limited (PPL) last year.

The other transaction that would be completed this fiscal year is National Power Construction Corporation that would generate Rs2 billion. Earlier, during the CCOP meeting, Chairman Privatization Commission, Mohammad Zubair informed the Finance Minister that the transaction received overwhelming response in financial markets all over the world. Finance Minister Ishaq Dar congratulated Chairman PC, Mohammad Zubair, his team and advisors on their hard work to make the HBL transaction a complete success. He added that the tremendous response at home and abroad, including offering by IFC and CDC, spoke volumes of the confidence that the international financial institutions had in Pakistan’s economic standing brought about by concerted economic reforms by the PML-N Government.

Minister for Information, Pervaiz Rashid, Minister for P&NR, Shahid Khaqan Abbasy, Advisor Finance Division, Rana Assad Amin, Chairman Privatization Commission Moahmmad Zubair Secretary Privatisation Commission, Ahmed Nawaz Sukhera and other senior officials attended the meeting.