Mandate: Khusshali Bank | Date: 2011/12 | Country: Pakistan | Type: M&A | Amount in USD: 26 million Clients: United Bank Ltd (UBL), Shorecap II, Incofin, ResponsAbility, Triple Jump
This mandate was to assist a consortium led by UBL, the second largest commercial bank in Pakistan, to purchase a 68% stake in Khushhali Bank (KBL), the first and largest microfinance bank in Pakistan. This stake was held by a dozen or so commercial banks, with UBL itself being an owner of 11% (bringing the total stake to be ultimately owned by the consortium to 79%). Initially an intending seller, UBL accepted our advice to instead remain as a shareholder, with the objective of having a gateway into the microfinance market and also a platform for its Omni cashless payments system.
Not having a background in microfinance, however, UBL wished to have experienced shareholders alongside it, so the first task under the mandate was to identify additional consortium members. With the Shorecap II fund an additional anchor investor with UBL, we recruited Incofin, responsAbility and Triple Jump to complete the new shareholder group.
The key benefit of this transaction to Khushhali was to replace a large group of minority shareholders, who had little or no interest in the work or results of the bank, with a small team of investors that could bring to the Board and management both microfinance experience and commercial bank discipline and expertise, alongside significant cash resources. With the new investor group on board, management would be re-empowered and re-invigorated.