Pakistan’s Habib Bank Limited has once again initiated the process to divest its stake in Himalayan Bank, reviving its exit plan after two previously unsuccessful attempts.
On Friday, June 13, Himalayan Bank issued a 35-day public notice addressed to its existing promoter shareholders, inviting them to purchase 28,012,447 units of promoter shares currently held by the Habib Bank. The minimum asking price has been set at Rs 112.80 per share.
As per Directive No. 10 of the Unified Directives, 2081 issued by Nepal Rastra Bank (NRB), existing promoter shareholders are granted the first right of refusal when such shares are put up for sale. Only if the current promoters decline to purchase the shares can the sale be extended to other individuals or institutions, in accordance with existing laws.
In line with the Bank and Financial Institutions Act (BAFIA), promoter shares cannot be sold within the first five years of operation. Furthermore, any transaction involving more than a 2% stake in a company or institutional entity must receive prior approval from NRB.
Habib Bank previously attempted to sell its stake in Mangsir 2080 (mid-November to mid-December 2023), when it reached a tentative agreement with Himalayan Reinsurance Company to sell its shares at Rs 130 per unit. However, the deal was scrapped after NRB declined to grant regulatory approval.
Prior to the merger of Himalayan Bank with Civil Bank, Habib Bank held a 20% stake. Following the post-merger share adjustments, its ownership decreased to 12%—equivalent to the 28 million shares now being offered for sale.
Habib Bank’s initial effort to exit Nepal’s banking sector dates back four years, when it entered into an agreement with the UK-based Commonwealth Development Corporation (CDC). That deal collapsed after facing resistance from Himalayan Bank’s Board of Directors.
This time around, Himalayan Reinsurance Company has emerged again as the likely buyer. The reinsurance firm is chaired by Shekhar Golchha of the Golchha Group, a prominent business conglomerate in Nepal. Golchha is also a former president of the Federation of Nepalese Chambers of Commerce and Industry (FNCCI).
