BRR Guardian Limited announces merger with BRR Guardian Modaraba

KARACHI: BRR Guardian Limited delightfully broke the news of a merger with BRR Guardian Modaraba, to the Pakistan Stock Exchange (PSX). It was announced after a decision of the Sindh High Court approved the merger.   

What does BRR Guardian Modaraba do? 

Formed in 1983, B.R.R. Investments (Private) Limited (BRRI) aimed to promote leasing investments in Pakistan. They introduced two Modarabas in 1985 and 1990. A modaraba is one of the prime codes of the Islamic Financial System. 

BRRl was also a sponsor of Equity International Modaraba (ElM), which was launched in 1993. Later, the International Finance Corporation (IFC) joined as an equity partner in 1999. In 1998, B.R.R. Second Modaraba and Equity International Modaraba merged with B.R.R. Capital Modaraba and it was renamed B.R.R. International Modaraba. Guardian Modaraba merged with B.R.R. International Modaraba in 2006 and Crescent Standard Modaraba merged in 2017. As a consequence of these mergers, the paid-up fund of B.R.R Guardian Modaraba rose to Rs. 863.623 million, making it the largest Modaraba in Pakistan in terms of equity.

The company’s aim is to introduce and popularize Islamic financial products, adhering to Sharia principles. Meanwhile, they also aim to combat internet-based financial systems. The company works towards promoting a diverse range of Islamic financing methods and offer Sharia-compliant investment opportunities to stakeholders.

Essentially, the main business of the company involves leasing assets through ijara, while also investing in musharakas and murabahas, as well as, allocating funds to properties, equity, and debt securities. Furthermore, it offers custodial and management services under the entity known as B.R.R. Security Vault.

Court approval 

The letter to the PSX was accompanied by a court letter that confirmed that Justice Nadeem Akhtar has examined the Scheme that outlines the amalgamation of the two petitioners, BRR Guardian Limited and BRR Guardian Modaraba. It was confirmed that the petitioners successfully provided the court with all relevant material facts, including the latest financial position and audited accounts of BRR Guardian Modaraba for the year ended on December 31, 2021. The projected balance sheet of BRR Guardian Limited had also been received and reviewed by the court.

Members and certificate holders of the two companies agreed to the merger in their respective meetings held with the permission of the court. The document noted that the Registrar Modaraba has also given its consent to the sanction of the Scheme. The Court order relayed that all legal and formal requirements for the sanction of the proposed merger have been duly complied with by all the petitioners.

The court ruled the proposal to be lawful and deemed it to be in accordance with the public interest/policy or and not in violation of any law currently in force. The court acknowledged that since the members and certificate holders of all parties have unanimously approved the proposed amalgamation and in the lack of any impediment in sanctioning the Scheme, the court granted the petition and sanctioned the Scheme.