Price undisclosed as the United Insurance group agrees to sell its whole stake; approvals pending.
KARACHI, Nov. 13 (Focus Pakistan) — Mobilink Microfinance Bank has agreed to acquire 82.51% of Apna Microfinance Bank, a Lahore-based lender sitting on almost Rs17 billion in accumulated losses, and neither side has disclosed the price.
The sellers are United Insurance Company of Pakistan and its associated companies, which will dispose of their entire holding, according to a notice Apna sent to the Pakistan Stock Exchange on Friday. United Insurance put out a separate filing on the disposal.
Corporate, regulatory and third-party approvals are pending. Neither firm has given a completion date.
According to its unaudited interim statements, Apna lost Rs1.152 billion in the nine months to Sept. 30, compared with Rs1.225 billion in the same period last year. Its accumulated losses reached Rs16.99 billion, up from Rs15.84 billion in December.
That leaves Apna with negative equity of about Rs11.66 billion, according to the directors’ review. The figure is not a further loss; it means the bank’s recorded liabilities exceed its assets.
Its deposit base stood at about Rs30.9 billion in September, nearly three times its roughly Rs11 billion in advances.
The directors said recoveries from bad loans improved over the period, with credit loss charges and net write-offs falling to Rs42 million from Rs58 million.
December 7 Deadline Looms for Minority Shareholders
Shareholders outside the proposed transaction currently hold the remaining 17.49% of Apna Bank. Arif Habib Ltd, the manager to the offer, previously extended the deadline for announcing a public offer to Dec. 7 under Pakistan’s takeover rules.
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A Feb. 6 letter from the State Bank of Pakistan gave Mobilink the go-ahead for due diligence on Apna. It did not, the central bank said, amount to final approval of any merger or acquisition.
Mobilink then issued a public announcement of intention on March 12 with Arif Habib Ltd as manager to the offer. Apna, in a corporate briefing, later outlined a merger into Mobilink under Section 48 of the Banking Companies Ordinance, 1962, subject to due diligence and negotiations.
VEON, which owns Jazz, holds nearly all of Mobilink through VEON Microfinance Holdings B.V. Mobilink has operated since 2012.
Apna, which started out in January 2005 as Network Microfinance Bank before United International Group bought it and renamed it, would bring Mobilink a base of low-income borrowers and savers.
Mobilink’s president and chief executive, Haaris M. Chaudhary, said continuity for Apna customers would come first during the transition.
The transaction would expand Mobilink’s banking operations, but Apna’s financial position, the undisclosed purchase price and pending regulatory approvals leave significant questions about the proposed acquisition.
