Mughal Energy offers 10% shares for GEM board

In Business
April 16, 2024



KARACHI:

Mughal Energy, a wholly owned subsidiary of Mughal Iron and Steel Industries, has initiated the process of selling 10% of its shares to new investors. The aim is to raise financing and get listed on the Growth Enterprise Market (GEM) Board at the Pakistan Stock Exchange (PSX).

In a notification to the PSX, Mughal Iron and Steel Industries stated that last week, Mughal Energy filed an application through PRIDE for listing on the GEM Board. This involves “offering 10% of its post-paid-up capital as an initial offer to accredited investors in accordance with Chapter 5A of PSX Regulation.”

The GEM Board is a newly developed platform, distinct from the main board at PSX, designed to welcome small companies (based on paid-up capital) and tech startups. Only accredited investors (each with a net worth of Rs5 million) can trade shares in the companies listed on the GEM board, given that growth companies carry a higher risk of investment loss. Consequently, trade turnover on the Board remains relatively thin to date.

In late November 2023, the steel company informed its investors that it had completed the acquisition of Mughal Energy Limited (MEL), which became a wholly-owned subsidiary with effect from November 30, 2023. This acquisition is expected to “further enhance the strategic and competitive positioning of the Company.”

MEL had already procured land and a hybrid power plant, while local contracts for civil work, erection, and installation had also been awarded. The plant is expected to be commissioned within 18 months from the start of construction, which recently commenced.

This would mark the fourth listing on the GEM Board. The current three listings on the Board span sectors including technology, transport, and paper and board.

Approximately two years ago in 2022, about a dozen companies had planned to get listed on the GEM Board but postponed their decisions due to heightened domestic politics, economic instability, and escalating global geopolitics. Some have since resumed the process of joining the GEM Board amid the return of stability in the domestic economy.

The PSX’s benchmark KSE 100-Index hit a new all-time high of 70,545 points on Monday, indicating a rapid recovery after touching a low of 40,000 points in late June 2023.

Additionally, the PSX main board listed a new company during Ramazan, marking the first listing of 2024 and ending a seven-month-long hiatus in listings on the domestic bourse.

Bank Alfalah to acquire Samba Bank

Samba Bank informed the PSX on Monday that the bank has received a firm intention pursuant to a public announcement of intention from Bank Alfalah through its manager to acquire 852.04 million voting shares, representing 84.51% of the paid-up capital of Samba Bank.

This intention was notified to the board of directors of Samba Bank on April 9, 2024, and remains subject to requisite regulatory approvals, diligence, and execution of definitive agreements.

Bank Alfalah aims to acquire the majority (controlling) shares of Samba Bank from the Saudi National Bank.

Saudi National Bank (SNB) reported that it has received a non-binding offer from Bank Alfalah Limited regarding the proposed divestment of SNB’s 100% stake in Samba Bank (representing approximately 84.51% of shares in Samba Pakistan).

“SNB has agreed to evaluate the non-binding offer and will, subject to compliance with requirements under applicable law, including execution of a non-disclosure agreement, issuance of a public announcement of intention by Bank Alfalah Limited under the Securities Act, 2015, and approval from the State Bank of Pakistan, invite Bank Alfalah Limited to conduct due diligence on Samba Pakistan.”

Any decision relating to the potential transaction shall be subject to internal and regulatory approvals, and execution of definitive agreements, it added.

Published in The Express Tribune, April 16th, 2024.

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