Foreign direct investment: Telenor acquires 100% shares of Tameer Microfinance Bank

KARACHI – Foreign Direct Investment (FDI) of $1 million, mainly from Norway, is likely to land in microfinance sector, as Telenor signed a deal with Tameer Microfinance Bank (TMB) to acquire its 100% shares.

TMB President Nadeem Hussain confirmed that the sales purchase deal of the remaining 49% of minority shares have been accomplished between Telenor and the management of TMB on the behalf of minority shareholders. TMB has submitted the required paperwork for review to the central bank as per procedure, while the telecom is already done with due diligence process, he added.

Telenor Pakistan already owns 51% of the bank, which it bought in 2008 against the investment of $12.5 million or Rs 1 billion.

The analysts say the cost of remaining shares of TMB must be higher as compared with the price of its majority shares, which was acquired by the Norway-based cellular phone company earlier.

One year earlier, the telecom group postponed its plan to acquire 100% share of TMB due to the failure of negotiation on prices of shares. Telenor shifted its focus on expansion of 3G technology from e-commerce business. The Telenor group has now a sufficient team of bankers and finance managers to run its e-commerce business.

After possible acquisition, Telenor Pakistan would have the remaining stakes of TMB after its competitors establishing 100% ownership of microfinance bank including U Microfinance Bank and Waseela Microfinance Bank.

The bank is a subsidiary of Telenor Pakistan with 51%, with other shareholding distributed between EMCPL with 29%, International Finance Corporation (IFC) with 5%, Centurion Private Limited with 7% and two local businessmen with 8%.

TMB tops in the microfinance sector with its active savers standing at 7.7 million (60% market share) against values of Rs15.58 billion (30% market share). Its base of active borrowers stand at 248,301 (7.1% market share) with gross loan portfolio crossed Rs 10 billion (12.8% market share).

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