The Cabinet Committee on Inter-Governmental Commercial Transactions (CCoIGCT) has raised concerns over the proposed sale of First Women Bank Limited (FWBL) to a UAE-based entity, with several questions raised regarding the transaction’s legal and financial framework.
According to a news report, the committee, during a briefing by the Ministry of Privatisation, inquired about the Inter-Governmental Framework Agreement, as required by the Inter-Governmental Commercial Transactions Act, 2022. The Ministry of Privatisation confirmed that the agreement had been signed and shared with the committee before the meeting.
The committee sought further details on a clause facilitating the buyer’s acquisition of remaining shares from private banks. The Ministry clarified that the clause indicated “only on a best-effort basis” and did not commit the seller to ensuring the sale of remaining shares.
Addressing questions regarding the purchaser’s commitment to meet capital adequacy and leverage ratio requirements, the Ministry presented relevant clauses from the commercial agreement, detailing the staggered payment schedule agreed with the State Bank of Pakistan (SBP).
Following extensive discussions, the CCoIGCT approved the commercial agreement’s terms but directed FWBL to follow up with the Federal Board of Revenue (FBR) to expedite the final tax assessment and submit revised income tax returns based on audited accounts.
The Ministry of Privatisation also briefed the committee on the steps leading up to the sale, including the placement of FWBL on the privatisation list in November 2018 and the appointment of a financial advisory consortium in December 2019. The consortium’s due diligence report was finalized in June 2020, and the Cabinet Committee on Privatisation approved the initial transaction structure in August 2020.
In recent developments, the UAE government, through the International Holding Company, expressed interest in finalizing the commercial agreement, which was subsequently agreed upon and presented to the cabinet committee.
The Ministry of Privatisation sought CCoIGCT approval for the commercial agreement’s terms, which were negotiated and finalized with the UAE’s EVE Holding RSC. The Ministry of Law and Justice had also vetted the agreement.
The CCoIGCT approved the proposal, clearing the way for the final steps in the privatisation process.
