GFH Group to acquire 75% stake in Faysal Bank JV

May 30, 2024 (MLN): Ithmaar Holding held its meeting yesterday to get approval for the transfer of 66.7% of the issued and paid-up capital in Faysal Bank Limited (PSX: FABL) to a company entirely owned by Ithmaar Holding, Ithmaar Bank or IB Capital (Faysal Bank JV).

Following the transfer of shares in Faysal Bank to the Faysal Bank JV, 75% of the issued and paid-up capital in the Faysal Bank JV would be transferred to Bahrain-based GFH Financial Group.

GFH shall receive a yearly preferred return of 12% ROE on a cumulative accrual basis for a period of five years.

It was additionally proposed to transfer certain receivables of approximately $9.7 million as of 31 December 2023 (subject to any further adjustments in Q1 2024) from Faysal Bank to GFH.

The sale of FABL by the parent company is in light of the board's decision to transfer certain assets and liabilities of the company, Ithmaar Bank B.S.C. (Closed) and IB Capital B.S.C. (Closed) (together “Ithmaar”), to GFH or any of its subsidiaries or nominees and any other entity as may be agreed upon with GFH.

The assets are valued at $695 million to $715m, while liabilities are valued at $665m to $695m.

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