Duncan backs out from sale deal with Summit
Saturday, 7 May 2011
Jasim Uddin Haroon
The UK-based Duncan Brothers Thursday made a u-turn from its Tk 4.5 billion worth proposed deal to sell part of its stakes in a non-banking financial institution (NBFI) and an insurance company. In September 2010, the board of directors of the United Leasing Company Ltd and the United Insurance Company Ltd signed a memorandum of understanding (MoU) with Summit Group and one of its concerns. "Boards of both United Leasing and United Insurance Thursday took the decision not to sell the stakes of the companies," said an official of United Leasing Friday. According to the deal, Duncan Brothers and its subsidiaries were to sell 59 per cent shares of United Insurance and 30 per cent shares of United Leasing. Duncan holds a total of 3.47 million shares of the two entities. Summit agreed to purchase the shares of the two companies on an average price of Tk 2,200 each. Summit Industrial, and Summit Mercantile Corporation and Cosmopolitan quoted the highest prices to purchase the two NBFIs. Summit and its sister concern paid 10 per cent earnest money worth Tk 450 million to Duncan in September 2010 for the deal. AB Bank and Eastern Bank Consortium was the second largest bidder, offering Tk 800 million lower than that of the Summit. Prime Bank was the third bidder. Duncan Brothers appointed Citi Bank NA as its adviser to complete the sale procedures, including asset valuations. But the procedures of purchasing remained halted, following filing of a writ petition by one small investor - Shah Alam Babu. The High Court in its verdict Thursday said the period of the agreement between Summit and Duncan is terminated. Advocate Afzal, lawyer of United Leasing and United Insurance told the FE: "There is no bar in reviewing the agreement by the boards, as according to the HC, the agreement is terminated." United Leasing, listed in the stock market in 1994, has the paid-up capital of nearly Tk 530 million. United Insurance, listed in 1990, has Tk 300 million paid-up capital. Both the NBFIs belong to the first generation in the country. Aziz Khan, chairman of Summit Group, told the FE: "This is very unfortunate for us." He also said they will consult the lawyers for the next course of action, if any. "I'll do what my lawyers will advise me to do," Mr Khan added.
The UK-based Duncan Brothers Thursday made a u-turn from its Tk 4.5 billion worth proposed deal to sell part of its stakes in a non-banking financial institution (NBFI) and an insurance company. In September 2010, the board of directors of the United Leasing Company Ltd and the United Insurance Company Ltd signed a memorandum of understanding (MoU) with Summit Group and one of its concerns. "Boards of both United Leasing and United Insurance Thursday took the decision not to sell the stakes of the companies," said an official of United Leasing Friday. According to the deal, Duncan Brothers and its subsidiaries were to sell 59 per cent shares of United Insurance and 30 per cent shares of United Leasing. Duncan holds a total of 3.47 million shares of the two entities. Summit agreed to purchase the shares of the two companies on an average price of Tk 2,200 each. Summit Industrial, and Summit Mercantile Corporation and Cosmopolitan quoted the highest prices to purchase the two NBFIs. Summit and its sister concern paid 10 per cent earnest money worth Tk 450 million to Duncan in September 2010 for the deal. AB Bank and Eastern Bank Consortium was the second largest bidder, offering Tk 800 million lower than that of the Summit. Prime Bank was the third bidder. Duncan Brothers appointed Citi Bank NA as its adviser to complete the sale procedures, including asset valuations. But the procedures of purchasing remained halted, following filing of a writ petition by one small investor - Shah Alam Babu. The High Court in its verdict Thursday said the period of the agreement between Summit and Duncan is terminated. Advocate Afzal, lawyer of United Leasing and United Insurance told the FE: "There is no bar in reviewing the agreement by the boards, as according to the HC, the agreement is terminated." United Leasing, listed in the stock market in 1994, has the paid-up capital of nearly Tk 530 million. United Insurance, listed in 1990, has Tk 300 million paid-up capital. Both the NBFIs belong to the first generation in the country. Aziz Khan, chairman of Summit Group, told the FE: "This is very unfortunate for us." He also said they will consult the lawyers for the next course of action, if any. "I'll do what my lawyers will advise me to do," Mr Khan added.