The company, he said, is being established with an initial Rs500 million paid up capital which is expected to be stretched to Rs1 billion soon. It will concentrate on “low cost housing” besides catering to the requirements of commercial buildings, service apartments and hotels. He said a number of international companies especially from China , UAE and Malaysia have expressed their willingness to enter into joint ventures with the Saudi Pak Real Estate Development Company by substantially investing in real estate sector of the country. The new company will also finance infrastructure projects and housing schemes besides providing funds for the development of new tourist resorts, shopping malls, hotels and office blocks. It will have a complete corporate and management structure for promoting long term investment horizon for which it will follow the draft rules of the Security and Exchange Commission of Pakistan (SECP) as being the regulator.
The company will be fully operational in March next year for which Javed Kalia has been appointed as its Chief Executive Officer (CEO). The company will be based in Karachi having offices in Lahore and Islamabad as well. The objective, he pointed out, is to fund top quality residential apartments and other office buildings. All the market segments will be adequately covered by the real estate company. He said that more funding for the real estate company will be raised from the banking sector and the capital market. A world wide modern concepts will be utilised for building housing and other projects through the real estate company. Zahir said a regional office has been set up in Riadh after having a formal approval of the Saudi government. It will be a liaison office the purpose of which will be to study the raising of funds for Saudi Pak Investment Company and its subsidiaries.
Responding to a question, he said that Saudi Pak Investment Bank was experiencing financial constraints and particularly to meet Rs6 billion paid capital requirement by 2009. It has not earned a profit like other banks last year, he said adding that the parent Saudi Pak Investment Company has to increase its paid up capital to Rs6 billion by 2009 and under these circumstances, it was becoming difficult to retain the investment bank.
The bank, however, he has created a good image due to its fine infrastructure, good branch network and IT and Human Resource departments A a number of investors have approached the company to buy Saudi Pak Investment Bank. “A lot of liquidity is roaming around in our part of the world to purchase banks and other companies which is why said Pak bank is likely to get a better price,” he said. He added that the bank has a good net work of branches and its share is currently being trading at Rs24 per share in the Karachi stock market. The CEO of the company also said that a decision been taken by the board of the directors of Saudi Pak agricultural and investment Company to convert it into a “public limited” company within this year so that it could issue public securities. The central bank has allowed the company to become a public limited company. He said that financial approvals of Saudi Pak Investment Company has significantly increased as by May 2007 total approvals reached to Rs3.683 billion as against Rs2.541 billion of last year, registering an increase of 44.9 per cent. Similarly, disbursements in the first five months of 2007, were amounted to Rs2.116 billion against Rs2.019 billion of last year, having an increase of 4.8 percent.
Also, recoveries stood at Rs2.007 billion in the first five months of this year against Rs1.113 billion of last year registering an increase of 32 per cent. Those new sectors who got major financing included steel, fertiliser, cement, power and constructions, Zahir said. Similarly, Saudi Pak Insurance Company, he pointed out, has achieved a gross income of Rs236 million and is expected to wipe out its accumulated losses in 2007. The company is considered a robust entity having a potential to raise its business in profitability. The Saudi Pak Leasing Company is also doing fine its assets have grown to over Rs6 billion as the year 2006 was good for it, he added.