UAE investor seeks changes in agreement to purchase Summit Bank

A UAE-based investor leading the consortium set up to acquire the majority stake in Summit Bank Ltd proposed on Monday that the share subscription agreement be changed to reflect a reduced amount of fresh equity injection. Nasser Abdulla Hussain Lootah said he’ll now subscribe to 3.98 billion new shares of the bank at the previously agreed rate of Rs2.51 apiece. The transaction will generate Rs10bn in equity for the commercial bank. The injection of fresh liquidity is meant to fix the bank’s capital adequacy issues. Without naming Summit Bank, the International Monetary Fund recently urged the State Bank of Pakistan to take a “more proactive approach” in addressing the matter of its undercapitalisation. The original share subscription agreement, signed last year, entailed that the bank would issue a total of 5.97bn shares to both the Lootah-led consortium and other minority shareholders at Rs2.51 apiece. That would’ve generated fresh equity of Rs15bn.