Karachi, May 29, 2012 (PPI-OT): Enclosed please find a copy of the Notice of Extraordinary General Meeting to be held on June 27, 2012 for circulation amongst your members.
Notice is Hereby Given that an Extraordinary General Meeting of the members of JS Bank Limited will be held on June 27, 2012 at Beach Luxury Hotel, Karachi at 10:00 am to transact the following business:
1. To confirm the minutes of sixth Annual General Meeting held on March 29, 2012.
2. To consider, and if thought fit, to pass the following resolutions as Special Resolutions, with or without modifications, addition or deletion:
RESOLVED by way of Special Resolution that consent and approval be and is hereby accorded in terms of Section 208 of the Companies Ordinance, 1984, the Listed Companies (Substantial Acquisition of Voting Shares) Ordinance, 2002, the Rules and Regulations framed there under and all other applicable provisions of the aforesaid law, for long term equity Investment by JS Bank Limited (the “JSBL”) of upto Rs. 816,609,554 for acquiring upto 76,011,809 ordinary shares of the face value of Rs. 10 each of JS Investments Limited (the “JSIL”) by way of acquisition of 52,023,617 ordinary shares of the face value of Rs. 10 each i.e., 52.023617% of the paid up share capital of JSIL from holding company, Jahangir Siddiqui & Company Limited (the “JSCL”) and balance of upto 23,988,192 ordinary shares of the face value of Rs. 10 each from other shareholders of JSIL who may subscribe to the tender offer to be made by JSBL in exchange for issue and allotment of upto 105,018,850 ordinary shares of JSBL valuing Rs. 816,609,554 to be issued to JSCL and such other shareholders on the basis of swap ratio computed by independent professional firm, M/s. Yousuf Adil Saleem & Company, chartered Accountants, a member firm of Deloilte Touche Tohmatsu Ltd. based on the break up values determined by the statutory auditors of JSIL and JSBL as per audited accounts of April 30, 2012 subject to the consent and approval of shareholders of JSCL and regulatory approval(s) and exemption(s) (the “Transaction”).
RESOLVED FURTHER that subject to the sanction and approval of the Securities and Exchange Commission of Pakistan under Section 84, Section 86 and all other applicable provisions of the Companies Ordinance, 1984, Rules and Regulations framed there under, upto 105,018,850 ordinary shares of the face value of Rs. 10 each of JSBL be offered, issued and allotted by way of otherwise that tight shares to JSCL and other shareholders of JSIL who will subscribe to the tender offer to be made by JSBL in terms of the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers ) Ordinance, 2002 at a price of Rs. 7.7758379 per share i.e., at a discount of Rs. 2.22416210 per share.
RESOLVED FURTHER that consent and approval be and is hereby accorded to issue shares at discount and by way of otherwise than right shares for consideration otherwise than in cash subject to the relaxation and exemption under the Companies (Issue of Capital) Rules, 1996 from the Securities and Exchange Commission of Pakistan.
RESOLVED PURTHER that the acquisition of upto 76,011,809 shares of JSIL by JSBL from JSCL and other shareholders of JSIL be and is hereby approved subject to the compliance to the requirements of the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance 2002 for consideration by way of exchange of shares of JSBL at a discounted price of
Rs. 7.7758379 per share i.e., at a discount of Rs. 2.22416210 per share which shall be offered to the JSCL and other shareholders of JSIL without rights offering on the basis of the swap ratio of
1.38161230:1 i.e. 1.35161230 shares of face value of Rs. 10 each in JSBL for every one share having a face value of its, 10 each in JSIL.
RESOLVED FURTHER that the swap ratio for issue of shares of JSBL in exchange for acquisition of shares of JSIL held by JSCL and other shareholders of JSIL computed by the independent professional firm, M/ s M. Yousuf Adil Saleem & Company, Chartered Accountants, a member firm of Deloitte Touche Tohmatsu Ltd on the basis of break up values of JSIL (Rs. 10.74319325 per share) wad JS8L (Rs. 7.7755379 per share) calculated by their respective statutory auditors as per audited accounts of April 30, 2012 i.e., 1.38161230 ordinary shares of the face value of Rs. 10 each in JSBL for every one ordinary share having face value of Rs. 10 each in JSIL be and is hereby approved.
RESOLVED FURTHER that in consequence of issue and allotment of shares of JSBL to JSCL and other shareholders of JSIL, any fractional shares which are not in exact multiples will be consolidated into whole shares and sold on Karachi Stock Exchange and the sales proceeds thereof will be distributed amongst the shareholders of JSIL in accordance with their entitlements.
RESOLVED FURTHER that the aforesaid special resolutions shall be subject to any amendment, modification, addition or deletion as may be suggested, directed and advised by the SECP and / or any other regulatory body which suggestion, direction and advice shall be deemed to be part of these Special Resolutions without the need of the shareholders to pass a fresh Special Resolution.
RESOLVED FURTHER that any two of the President, Group Head Treasury & Investment Banking and the Company Secretary of the JSBL (the Authorized Officers), be and are hereby jointly authorized on behalf of JSBL to procure necessary approvals / exemptions, as the case may be and take such other steps and actions necessary, ancillary and incidental for the acquisition of upto 76.011809% shareholding comprising of 76,011,809 ordinary shares of the face value of Rs. 10 each of JSIL in exchange for shares of JSBL to be Issued at discount and by way of otherwise than right shares and issue, sign and execute such other documents, papers, instruments etc., as may be necessary or expedient Including the Share Purchase Agreement for the purpose of giving effect to the spirit and intent of above resolutions.
1. The Share Transfer Books of JSBL shall remain closed from June 20, 2012 to June 26, 2012 (both days inclusive) for determining the entitlement of the shareholders for attending the Extraordinary General Meeting. Physical transfers and deposit requests under the Central Depository System received by the JSBL’s Registrar M/ s Technology Trade (Pvt.) Limited, Dagia House, 241-C, Block 2, P.E.C.H.S. Karachi by the close of business on June 19, 2012 will be treated in time.
ii. A shareholder entitled to attend and vote at the meeting may appoint another member as his / her proxy to attend anti vote for him / her. Proxies, in order to be effective must be received at the Registered Office of the JSBL duly signed and stamped not later than 48 hours before the time of the meeting.
iii. Shareholders holding physical shares as well as those registered in the Central Depository Company of Pakistan Limited and or their proxies must bring their original CNIC’s or original Passports at the time of attending the meeting for identification purposes. If proxies are appointed by such shareholders the same must be accompanied with attested copies of the CNIC’s or the Passport of the shareholders. Representatives of corporate members should bring the usual documents i.e., Board of Directors Resolution / Power of Attorney with attested specimen signature at the lime of attending the Extra Ordinary general Meeting.
iv. Shareholders are requited to notify immediately changes, if any, in theft registered address.
v. The explanatory statement as required under section 160(1)(b) of the Companies Ordinance, 1984 is being sent to the shareholders along with a copy of this notice.
Statement Under Section 160 (1) (b) of the Companies Ordinance, 1984
This statement sets out material facts pertaining to the special business to be transacted at the Extra Ordinary General Meeting of JS Bank Limited (the “JSBL”) to be held on June 27, 2012.
JSBL is a banking company listed on the Karachi Stock Exchange. It is a subsidiary of the Jahangir Siddiqui & Company Limited (the “JSCL”). JSCL presently owns 68.32% of the paid up share capital of JSBL comprising of 683,368,538 ordinary shares of the face of Rs. 10 each.
JSCL also owns 52.023617% of the total paid up share capital of JS Investments Limited (the “JSIL”) comprising of 52,023,617 ordinary shares of the face value of Re. 10 each, JSIL is a non banking finance company listed on the Karachi Stock Exchange and licensed by the Securities and Exchange Commission of Pakistan.
The State Bank of Pakistan (the “State Bank”) has prescribed minimum paid up capital (net of losses) for banking companies to be raised to PKR 8 billion by the end of financial year 2011 and PKR 9 billion by the end of 2012. The paid up capital of JSBL (net of losses & discount on issue of shares) is PKR 7.415 billion as of December 31, 2011. In order to meet the requirement for enhancing the paid up share capital of JSBL, the Board of Directors in their Meeting held on April 25, 2012 considered the proposition that JSBL acquires majority shares in JSIL, an associated company in terms of Section 208 of the Companies Ordinance, 1984 (the “Ordinance”) from JSCL and such other shareholders of JSIL who may subscribe to the tender offer to be made by JSBL in terms of Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance, 2002 (the “Existing Shareholders”) in exchange for the issue and allotment of new shares by JSBL to the Existing Shareholders of JSIL at discount and otherwise than right offering subject to the requisite regulatory approvals and approvals of shareholders of JSBL and JSCL (the “Transaction”).
State Bank has granted its in-principle approval to JSBL in respect of the Transaction. State Bank has also granted its approval to JSBL for holding at least 52.023617% shares in JSIL as a subsidiary of JSBL on the condition that the swap ratio for the transaction will be the factor of break up values of JSBL and JSIL so that no goodwill is created in this transaction.
The Board of Directors of JSBL in their meeting held on April 25, 2012 decided that the number of shares of JSBL to be issued in favor of JSCL and the other shareholders of JSIL and the value per share of JSBL shall be determined by the Board of Directors of JSBL and JSCL acting on the advice of the independent professional firm in accordance with the aforesaid condition imposed by the State Bank in its in-principal approval and subject to regulatory approvals, approvals of shareholders of JSBL and JSCL.
An independent professional firm M/s M. Yousuf Adil Saleem & Company, Chartered Accountants, a member firm of Deloitte Touche Tohmatsu Ltd, was appointed for computation of the share swap ratio on the basis of break up values of JSBLS and JSIL shares as per audited accounts of April 30, 2012 determined respectively by M. Yousuf Adil Saleem & Co. Chartered Accountants a member firm of Deloitte Touche Tohmatsu Ltd. and Anjum Asim Shahid Rahman, Chartered Accountants. The firm’s Report on Computation of Swap Ratio (the “Report”) was considered by the Board according to which 1.38161230 ordinary shares of the face value of Rs. 10 each in JSBL could be issued for every one ordinary share of the face value of Re. 10 each in JSIL. The Board of Directors of JSBL in their meeting held on 25 May, 2012 has approved the said swap ratio for the Transaction subject to the approval of the shareholder of JSCL, JSBL and requisite regulatory and other approvals/permissions, if required.
In consideration of the foregoing, the respective Board of Directors of JSBL and JSCL have resolved to commence the Transaction process and to take all such steps as are necessary in this regard including approvals from Securities and Exchange Commission of Pakistan and compliance with all applicable laws.
Based on the break up values of JSBL and JSIL, the Board of Directors of JSBL recommended issuance of further shares of JSBL to the Existing Shareholders at a discounted price of Rs. 7.7758379 per share which shall be offered to the Existing Shareholders of JSIL without rights offering on the basis of the swap ratio of 1.38161230:1 i.e. 1.38161230 shares of face value of Rs. 10 each in JSBL for every one share having a face value of Rs. 10 each in JSIL. As a result of the foregoing JSBL is expected to hold at least 52.023617% shares in JSIL and consequently JSIL will be deemed as a majority owned subsidiary of JSBL;
Other than substantially increasing the paid up capital of JSBL, the Transaction also carries substantial benefits in terms of operating capability and revenue generation which would eventually be passed on to the shareholders in the form of improved profit earnings and dividend distribution and better gains in the form of share prices. JSBL would be in a position to offer varied financial products and services as a result of a diversified portfolio.
Some of the benefits of the Transaction are enumerated below:
(a) Larger Asset and Equity Base
The Transaction would lead to increased asset base and size of the combined entity in terms of capital and reserves. The increased equity would provide greater comfort to potential creditors, correspondent banks and rating agencies.
JSBL would be in a position to offer varied financial products, thus giving the opportunity of one-window operations to its clients. A larger client base with varied financial products to offer should give the JSBL a competitive edge over its competitors.
(c) Increase in Risk Absorption Capacity
The increased size of JSBL would increase its risk absorption capacity thus, enhancing its capacity to manage the potential risks arising out of an adverse and uncertain operating environment. In the long run, this factor should provide greater stability as well as sustainability in operations.
JSIL in which investment will be made by JSBL and its sponsors and directors who are members of JSBL have no interest in the proposed transaction or the associated company except to the extent of their investments, if any.
No Director of JSBL has any interest, whether directly and indirectly, in the proposed Transaction except to the extent of their shareholdings in JSBL, JSCL and JSIL, if any.
The directors submit that they have carried out necessary due diligence for the proposed transaction particularly the investment in JS Investments Limited.
Inspection, of Documents:
The audited financial statements of JSIL and JSBL for the year ended June 30, 2011 and December 31, 2012 respectively and for the period ended April 30, 2012, swap report of the independent professional firm and related information shall be available for inspection of the members in the general meeting.
Information Requited under Regulation 3 (1) (a) of the Companies (Associated Companies or Associated Undertakings) Regulations, 2012.
1. Name of associated company
JS Investments Limited (JSIL)
2. Criteria for associated relationship
JSBL and JSIL are subsidiaries of JSCL
3. Purpose, benefit and period of Investment
To increase the paid up capital to meet minimum capital requirement.
Dividend and capital appreciation in addition to the increase in paid up share capital.
Long-term strategic Investment.
4. Maximum amount of Investment
Up to PKR 816,609,554
5. Maximum price at with securities to be acquired
PKR 10.74319325 per share
6. Maximum number of securities to be acquired
Up to 76,011,809 shares
7. Number of securities and percentage thereof held before and after the proposed investment
After: up to 76,011,809 shares i.e., 76.012%
8. Average of the preceding 12 weekly average price of the security intended to be acquired
9. Break-up value of securities intended to be acquired on the basis of the latest audited financial statements
PKR 10.74319325 as of April 30, 2012
10. (Loss) / Earnings per share of the associated company for the last 3 years:
Year ended June 30, 2011 PKR 0.45
Year ended June 30, 2010 PKR 0.24
Year ended June 30, 2009 PKR (17.21)
11. Sources of funds from which securities will be acquired:
No funds will be required as the transaction is based on exchange of shares of JSIL with the chares of JSBL.
12. Salient features of all agreements entered into with the associated company or associated undertaking or with regard to the proposed investment.
The Company will enter into an agreement with JSCL at an appropriate time.
13. Direct or indirect interest of directors, sponsors, majority shareholders and their relatives in the associated company or the transaction under reference.
The Directors, sponsors, majority shareholders of JSBL and their relatives have no vested interest in the associated company or the proposed investment except to the extent of their shareholdings, if any in the associated company.
14. Any other important detail necessary for the members to understand the transaction.
The objective of the proposed transaction is to increase the paid up share capital of JSBL by swap of shares of JSIL held by JSCL and other shareholders of JSIL in exchange of new shares of JSBL.
Information required for issue of shares otherwise than right shares under proviso to Section 86 (1) of the Companies Ordinance, 1984
i) Justification for Issue of Shares otherwise than Right shares and not as right shares;
This is a structured transaction approved by the State Bank of Pakistan.
ii) Names of the persons to whom shares will be issued;
JSCL and other shareholders of JSIL who will subscribe to the tender offer of JSBL
iii) Price at which shares will be issued and justification with reference to latest available market price, breakup value per share.
Rs. 7.7758379 per share (breakup value per share as on April 30, 2012), Issuance of shares at breakup value is in compliance of SBP approval. The market price as of May 25, 2012 was Rs. 5.84 per share.
iv) Details of assets, if shares are to be issued for consideration otherwise than in cash:
Shares will be issued against the acquisition of shares of JSIL from JSCL and other shareholders of JSIL who would subscribe to the tender offer of JSBL.
v) Purpose of the Issue, Utilization of proceeds and benefits to the Company and its shareholders;
This structured transaction is for the purpose of increasing equity of JSBL to meet the minimum capital requirements set by the State Bank of Pakistan for banking companies. There will be no proceeds from the issue of shares. Benefits have been explained in the previous paragraphs.
vi) Existing shareholding of the persons / organizations to whom proposed shares will be issued;
JSCL’s current shareholding in JSBL is 68.32% while the shareholding of other shareholder of JSIL will be known after the tender offer.
vii) Total shareholding of persons / organization after the proposed issue of shares (in number as well as percentage of paid up share capital of the company);
The shareholding of JSCL will increase to 755,245,007 shares. However, exact percentage will be known after the tender offer is made by JSBL.
viii) Written consent of the Company to purchase shares;
Board of Directors of JSBL has approved the acquisition of shares of JSIL subject to the approval of shareholders of JSBL.
ix) The new shares of JSBL will rank pari passu in all respect with the existing shares of JSBL;
x) The subject issue of shares is subject to the approval of shareholders.
Status of Implementation of Previous Special Resolution for Investment in Associated Companies
i) Reasons for not having made investment so far:
ii) Major change in financial position of investee companies since the date of last resolution:
For more information, Contact:
Head of Corporate Affairs
JS Bank Limited
Shaheen Commercial Complex,
Dr. Ziauddin Ahmed Road
P. O. Box: 4847
UAN: +92 21 111 JS BANK (572-265)
Phone: +92 21 3227 2569-80
Fax: +92 21 3263 1803