SAUDI PAK EXPANDING OPERATIONS IN PAKISTAN
From SHAMIM AHMED RIZVI, Islamabad
Oct 31 - Nov 13, 2005
Saudi Pak is planning to undertake two additional business pursuits. The two new business ventures in the final stages of planning are Saudi-Pak Property and Infrastructure Development Company and Saudi Pak Securities Limited, this was disclosed to PAGE by Mr. Rashid Zahir, Chief Executive of Saudi Pak, in an extensive interview.
Actually, Saudi Pak is pursuing its vigorous expansion and diversification program, the Saudi Pak Industrial & Agriculture Investment Company, after setting up a Commercial Bank, a Leasing Company and an Insurance Company,
Saudi Pak Property and Infrastructure Development Company will undertake broad based business of land acquisition and development and construction of residential apartments, houses, offices and shopping malls, as well as infrastructure including roads, dams, airports, ports and power projects. The company will have long-term horizon. It will have initial paid up capital of Rs. 500 million and will have its offices in Karachi, Lahore and Islamabad. Saudi Pak Securities will undertake the business of brokerage in stocks and shares and money market transactions, discounting of fixed income securities, acquisition and mergers and other financial services. It will have initial paid up capital of Rs. 200 million and will be based at Islamabad.
Saudi Pak Industrial and Agriculture Investment Company (Pvt) limited acquired controlling interest in Prudential Commercial Bank Limited now Saudi Pak Commercial Bank Limited in September 2001. The bank has a paid up capital of Rs. 2,250 million and is listed on the stock exchange. It has its main office in Karachi and a network of 38 branches operating in major cities in the country. The bank mobilizes deposits of all types and provides full range of funded and non-funded financing facilities to its customers. The deposit base of the bank stood at Rs. 29,977 million and advances portfolio at Rs. 25,057 million as on March 31, 2005.
Saudi Pak Board of Directors, in its 86th meeting held on December 06, 2003, had approved the establishment of Saudi Pak Insurance Company Limited. The Securities and Exchange Commission of Pakistan granted the No Objection Certificate to incorporate the company on 10th February, 2005 and awarded the company "Certificate of Incorporation" on 15th February, 2005. The first meeting of the Board of Directors was held on 3rd March, 2005 wherein the Memorandum and Articles of Association were approved. The board also approved the appointment of the Chief Executive Officer, Capt. Azhar Ehtesham Ahmed and Company Secretary, Mr. Naveed Zafar Mirza.
The company opened its first official bank account on 10th March, 2005 with a deposit of the paid up capital of the company equal to Rs. 200 million. A statutory deposit of Rs. 20 million was placed with the SBP in the form of 7% five years Pakistan Investment Bond. The "Certificate of Registration was issued on 12th March, 2005 by SECP while the "Certificate of Commencement of Business" was issued on 13th April, 2005. The company started its business immediately after the issuance of the certificate.
The company has acquired 2nd floor in State Life Building 2A, Wallace Road, Karachi for its head office. The company has started writing insurance business.
Earlier in 1997 Saudi Pak entered into leasing business by acquiring 30 percent stake in Standard Chartered Mercantile Leasing Company Limited now Saudi Pak Leasing Company Limited (in 1997). The company is listed on the Stock Exchange and is fourth largest company in the leasing sector in Pakistan. The total assets of the company stood at Rs. 4,536 million as on March 31, 2005. The company generated total revenues of Rs. 270.0 million and earned net profit after tax Rs. 88.0 million for the nine months ended March 31, 2005.
Saudi Pak Industrial and Agricultural Investment Company (Pvt) Limited was incorporated in December 1981 under a joint venture Agreement signed between the Kingdom of Saudi Arabia and the Government of Pakistan. The initial paid up capital of the company was Rs. 1,000 million, which has since been increased to Rs. 2,000 million through capitalization of reserves and is held as under:
- Kingdom of Saudi Arabia through Public Investment Fund 50%
- Government of Islamic Republic of Pakistan through State Bank of Pakistan 50%
The Board of Directors of the company comprises six directors, three of whom represent the Kingdom of Saudi Arabia and other three the Government of Pakistan. One of the Saudi Directors is Chairman and one of the Pakistani Directors is Deputy Chairman.
The day-do-day affairs of the company are managed by a General Manager, who is Chief Executive of the Company. He is appointed by the Board. The organizational structure of Saudi Pak is quite lean. Total number of employees is 76. The head office is located at Islamabad and a branch office at Karachi. A new branch office at Lahore has been opened recently.
The company has been awarded long-term entity rating of AA+(Double A plus) and short term entity rating of A!+(A one plus) with stable outlook by JCR-VIS Credit Rating Company Limited and affiliate of Japan Credit Rating Company. The entity rating has been maintained during the last five years.
Corporate Objectives of the company are:
- Promote investment industrial projects having orientation towards high value addition
- Extend efficient service to customers.
- Build a diversified equity investment portfolio promising optimum return.
- Achieve sustainable growth in operations.
- Maintain commercial competitiveness.
The product range of the company is well diversified and comprises the following:
- Project Financing.
- Short Term Working Capital Loans
- Equity Financing/Stock Market Operations
- Term Finance Certificates (TFCs)
- Lease Financing
- Underwriting of public issues of shares and TFCs.
- Syndication of financing
- Investment advisory services.
Since inception, the company has provided total financing of over 27.2 billion to 654 corporate clients in various industrial sectors. The cumulative disbursements amounted to Rs. 21.1 billion. The lending and investment operations showed the following trends during the year 2000-2004:
FOR THE ENDED DEC. 31
DISBURSEMENT OF FUNDS:
Saudi Pak has made strategic investments in the field of leasing, banking, insurance and commercial offices space. It now intends to undertake business of securities and property and infrastructure development.