KSA, Pakistan agree to allow Saudi Pak to go public

ISLAMABAD — Saudi Arabia and Pakistan have agreed to allow Saudi Pak Agricultural and Industrial Investment Company to become a public limited company preferably during 2006 with a view to have an access to the capital market.

By From A Correspondent

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Published: Sat 23 Sep 2006, 9:16 AM

Last updated: Sat 4 Apr 2015, 1:21 PM

Informed sources said that the Saudi Pak company could be able to further strengthen its resource base after converting it into a public company. A decision has been taken to get the proposed Saudi Pak public limited company enlisted on the stock exchanges of the country.

The company will make an initial public offering (IPO) after becoming a public limited company.

Sources said that both the governments of Saudi Arabia and Pakistan have also approved the setting up of a Saudi Pak Real Estate Development Company. A number of international companies from China, United Arab Emirates (UAE) and Malaysia have expressed their willingness to enter into joint venture with Saudi Pak by substantially investing in the real estate sector of Pakistan.

Pakistan's central bank was currently processing the establishing of Saudi Pak Real Estate Company and was expected to shortly accord its approval.

The new company will finance infrastructure projects and housing schemes in the country. It will also provide funding for the development of new tourist spots, shopping malls, hotels and office blocks.

The new company will have a complete corporate and management structure for promoting long term investment horizon in Pakistan

for which necessary regulatory approval of the Securities and Exchange Commission of Pakistan (SECP) was also being sought.

All the necessary spade work relating to the setting up of the real estate development company has been completed, and according to the sources, as soon as the formal approval was granted, its activities will start in all the four provinces as well as in Azad Kashmir.

The Board of the directors of the Saudi Pak Investment Company, which is 50:50 joint venture of Saudi Arabia and Pakistan, has approved an initial capital of Rs 500 million for the real estate development company.

"This will be a first ever organised company to cater to the huge requirements of housing, infrastructure etc. in Pakistan", a source said adding that the new company will offer significant loaning to help meet the housing and other related requirements. Sources said the new real estate development company will be established in Pakistan on the pattern of Malaysia, China, Saudi Arabia and the United Arab Emirates (UAE).

They also said all the four companies of Saudi Pak Investment Company — Saudi Pak Bank, Saudi Pak Leasing Company and Saudi Pak

Insurance company were successfully operating throughout Pakistan.

Saudi Pak Investment Company has made new approvals worth Rs4.7 billion during the first six months of 2006 against Rs3.3 billion of the same period last year. Likewise its disbursements were to the tune of Rs3.4 billion by June 2006 against Rs2.4 billion of the corresponding period of 2005. The company made a recovery of Rs2.5 billion in first six months of 2006 against Rs2.2 billion of the same period last year.

The company supported high disbursement to approval ratio of 82.6 per cent in 2005. It also posted a strong growth in capital market operations. For the fourth consecutive year, the rate of return on secondary market investment was in excess of 25 per cent.

Saudi Pak, sources said, maintained long term rating AA + (Double A Plus) and short term rating A1+ (A one Plus) with stable outlook for the sixth consecutive year. This rating has been awarded by JCR-VIS Credit Rating Company, which is affiliated with Japan Credit Rating Company.

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