JEDDAH, 31 August 2006 — Saudi businessman Prince Bandar bin Mohammed announced plans to buy a majority stake of Bangladeshi’s Rupali Bank for $330 million.
The sale will encompass a 67-percent stake in the bank with the government retaining 27 percent and the remainder held by investors.
A spokesman for the state’s privatization commission said the deal should be completed by the end of August. Rupali Bank Limited, one of Bangladesh’s four remaining state-owned commercial banks, was established in 1972 and formed through the takeover of the Muslim Commercial Bank, Australasia Bank, and Standard Bank, formerly operating in eastern Pakistan.
Prince Bandar last month told Bangladeshi officials he would invest $6 billion in emerging sectors of the Bangladeshi economy if the royal family won the bid. He also pledged substantial amount with the bank as a deposit, which will give a much-needed boost to the country’s sagging foreign exchange reserves.
“The prince offered $330 million in the bid, which was much more than others and beyond our expectations,” said Abdul Qayum, spokesman for the state commission. “The prince offered to pay the money instantly while the other bidders offered deferred payments.”
Following the suggestions of the World Bank and International Monetary Fund, Bangladesh’s privatization commission initiated the sale of Rupali Bank through an international tender, the closing date of which changed several times since last year. Rupali is the only remaining state-owned bank listed on the Dhaka and Chittagong stock exchanges with its shares recently doubling in the last four sessions by an estimated $2 million.
Of the seven consortia approved by the government, Malaysia’s MAA International Investment and Britain’s JJ Finance were disqualified in the final technical offers, said an official, leaving one rival bid from Domestic Investors Consortium of Bangladesh of $100 million.
Prince Bandar’s investment is being backed by his longtime friend and business associate, Moosa Bin Shamsher, who runs a recruitment operation in the Gulf and has strong links to a number of Saudi companies.
The Bangladeshi government currently holds 93.26 percent of Rupali’s shares, which has approximately 433 branches and employs a staff of 5,731 employees. The bank posted net profit for January-June of 163 million taka ($2.34 million) on a turnover of 857.5 million taka.
