BB short-listing investors to sell Oriental stakes

FE Team | Published: September 27, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The Bangladesh Bank (BB) has started preparing a short-list of the potential investors to sell shares worth Tk 4.0 billion of the troubled Oriental Bank Limited, official sources said.
They said the central bank is now scrutinising the expression of interests (EoI) submitted by six potential investors, from both home and abroad, for purchasing the shares of the Shariah-based private commercial bank.
"We are expecting to finalise a short-list of the potential investors to sell out the shares of the bank by the next week," a BB senior official told the FE Wednesday.
He also said the short-list will be prepared on the basis of the BB's 'Fit and Proper Test' method and only short-listed bidders will be contacted for taking part in the bidding process.
"Tender documents will be issued to the short listed bidders. Only the bidders, who will procure tender documents, will be invited to perform due diligence," the official noted.
Sources, however, said a committee will be formed to evaluate the tender documents after receiving bids from the interested parties.
The interested parties, which have already submitted their EoIs, are BRAC Bank, Summit Group, Domestic Investor Consortium, a forum comprising local commercial banks and non-banking financial institutions, the United Kingdom-based East Invest Private Equity Limited, ICB Financial Group Holdings of Switzerland and Hatton National Bank of Sri Lankan.
The Oriental Bank that faced a severe financial crisis was taken over by the central bank, which dissolved the bank's board of directors, removed its managing director, and appointed an administrator to run the bank temporarily.
The central bank has planned to complete the implementation of a restructuring scheme after installing a new management of the bank by January 25, 2008.
Under the scheme, approved by the government earlier, the paid up capital of the bank will reach Tk 7.0 billion while the general shareholders, including its depositors, will hold Tk 3.0 billion in terms of shares. Each share will have a face value of Tk 1000.
The BB official said there is no scope for extending the moratorium period of the bank further as per the existing rules and regulations
On June 27 last, the government extended the moratorium period on certain banking activities for six more months to protect depositors' interest and facilitate its restructuring.
On January 25 last, the finance ministry imposed a six-month moratorium restricting withdrawal of cash above Tk 10,000 by the depositors. In the case of new accounts, there was no restriction on withdrawal of money during the period.
The central bank took over the overall management of the bank and appointed an administrator on June 19, 2006 to protect the depositors' interest.
On August 6, 2006 the central bank ordered the removal of the managing director of the bank and suspended the board of directors for a period of one year.