December 09, 2020 (MLN): The Security Exchange Commission of Pakistan (SECP) has allowed Askari Bank Limited to issue up to 210,526,315 shares, against conversion of Term Finance Certificates (TFCs) amounting to Rs.6,000,000,000,  by way of other than right offer under Section 83 (1)(b) of the Companies Act, 2017 to holders of the said TFCs.

According to an announcement letter issued to PSX on December 09, 2020, the aforesaid approval of SECP is subject to the following conditions:

1. The conversion  mechanism, conversion price, trigger events, sufficiency of shares to be converted, the TFCs holders to whom shares are to be issued and all other features relevant to the aforesaid TFCs shall be governed by the terms and conditions and predefined events as disclosed to the shareholders and the Securities and Exchange Commission of Pakistan (the Commission).

2. The Bank, within seven days of the date of this letter, shall provide an undertaking to the effect that:

1. it will, at all times, maintain sufficient cushion in its authorized capital at least equal to the maximum number of shares to be issued, upon conversion, if required;

2. nothing in the applicable laws, its memorandum and articles of association restricts the Bank to issue the said shares; and

3. change, if any, in the covenants, regulatory approvals or material information or trigger events regarding the aforesaid contingent conversion of TFCs or effecting circumstances thereof shall be communicated to the Commission immediately.

3. The Bank shall inform the Commission within seven days of the issuance of shares upon conversion, if any, regarding the following;

1. number of shares issued;
2. list of TFCs holders to whom shares are issued containing sufficient detail including their respective holding and number of shares issued to each of them;
3. conversion price along with the working it is derived of; and
4. total paid up capital after issuance of the shares against the aforesaid TFCs

4. In case of any conflict regarding the terms of TFCs or conversion thereof, the Bank shall not take any decision that is contrary to the disclosures made to the shareholders, the Commission and the applicable laws.

5. The aforesaid approval for issuance of shares is being given based on the documents/ information provided, relevant laws and regulations and hence the Commission bears no responsibility whatsoever for the expressed or implied agreements between the TFC holders and the Bank.

Meanwhile, it is important to note that this approval is being issued without prejudice to the relevant requirements of the Securities Act, 2015, if applicable.

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