RIYADH, 2 September 2006 — The Privatization Commission (PC) in Bangladesh is poised to accept the offer of Prince Bandar Bin Mohammed Bin Abdulrahman Al-Saud for the purchase of the majority shares of the state-owned Rupali Bank (RB), the Bangladesh Embassy announced here yesterday.
“Prince Bandar submitted the highest financial offer of $330 million for the RB among the other international contenders,” Bangladesh Ambassador (Retired) Maj. Gen. S.M. Ikramul Haque told Arab News. He added that the prince’s proposal will be submitted for formal approval by the Cabinet.
The envoy said the prince’s participation not only gives a new hope to the Bangladesh people but also ensures a state-of-the art facility in the banking sector of the country. “ This will attract businessmen in the Arab region to invest in the country which would eventually produce mutual benefits to the concerned parties.”
The second highest bidder was Domestic Investors’ Consortium, which offered $100 million. He said two other bidders - MAA International Investment Limited of Malaysia and JJ Finance Ltd of the UK - failed to qualify so far as the technical and financial offers were concerned. In the technical and financial offer of the Prince Bandar, it was stated that the net worth is $20 billion. The Privatization Commission’s minimum requirement to bid for Rupali Bank was $250 million.
With the awarding of the bid to the prince, he will become the owner of 67 percent shares of the bank. The government, which now owns 94 percent shares of the bank will be left with only 27 percent shares. General investors own only 6.42 percent shares of the bank.
Earlier, the PC opened the technical offers by the bidders on Aug. 21 and, in association with the central bank, assessed the bidders’ efficiency, management and operational ability and financial viability. “With the sale of majority shareholdings of the Rupali Bank, the government would be fulfilling one of the major conditions set by the multilateral lenders, namely, the World Bank and the International Monetary Fund,” Haque said.
Rupali Bank is the smallest of the four nationalized commercial banks, having only 6.42 percent private shares. It has 493 branches, over 2,525,000 deposit accounts and 5,731 staff. The bank’s total asset is estimated at Tk59,488.4 million. Total assets of the Rupali Bank, as shown in December 2005, stood at $1.07 billion.
The process of signing a deal between the government and the Saudi prince and handing over the bank to him will follow soon after the approval next week. “The prince proposed to pay the total amount as soon as the deal is signed. The amount will obviously help the government in balancing the budgetary expenditure,” the envoy said.
The prince had also submitted a five-year business plan for the bank that includes rural banking through micro finance and credit facility for small and medium enterprises in urban areas. The technical offers of the prince include introduction of online banking, global banking and investment banking. The new administration also aims at opening branches of Rupali Bank across the subcontinent.
The share price of Rupali Bank on Dhaka Stock exchange jumped to Tk1,640 Thursday at the close of trading where it started at Tk1,300. The highest price was Tk1,700. Some 22,790 shares worth Tk35.33 million of the Rupali changed hands Sunday in a brisk business.
