BAHL to boost capital base with conversion of TFCs into ordinary shares

March 21, 2023 (MLN): The shareholders of Bank AL Habib Limited (PSX: BAHL) on Tuesday resolved to convert the Term Finance Certificates (TFCs) issued by the bank into ordinary shares, subject to a maximum of 145 million additional ordinary shares being issued upon such conversion.

The TFCs were issued for the purpose of Tier 2 Capital under Basel III Capital Instructions of the State Bank of Pakistan (SBP).

The conversion of TFCs into ordinary shares may be directed by the SBP on the occurrence of a point of non-viability, as determined by the SBP, at a price equivalent to the market value of the shares of the Bank on the date of the trigger of the point of non-viability as declared by SBP, in accordance with the applicable rules and regulations of SBP.

The conversion will be made in accordance with Section 83(1)(b) of the Companies Act, 2017, and all such ordinary shares shall be issued other than by way of rights. The issuance of such shares will further be subject to the approval of the Securities and Exchange Commission of Pakistan in accordance with Section 83(1)(b) of the Companies Act, 2017.

BAHL's decision to convert TFCs into ordinary shares is in line with SBP's regulations and will enable the bank to meet its Tier 2 capital requirements.

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