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Possible Privatization of HBFC

The federal government has directed the State Bank of Pakistan (SBP) to divest its entire, 90.31%, shareholding in House Building Finance Company (HBFC) – a major state-owned housing finance institution in the country, which is a step towards privatization of HBFC.

Consortium approved by the Privatization Commission as financial advisor to oversee potential privatization consists of MCB Bank, EY Ford Rhodes, Elixir Securities Pakistan (Private) Limited and Haidermota & Co (sub-contractor) against a minimum fee of Rs80.3 million for consortium financial advisory.

HBFC is a public limited company and as of December 31, 2016, the government held 62.50% shares while the remaining 37.50% stake was held by the SBP. Later in November 2017, then prime minister allowed SBP to acquire shares in HBFC against SBP’s debt amounting to Rs11.24 billion and mark-up of Rs5.12 billion. After this capital restructuring, shareholding of federal government was diluted from 62.50% to 9.69% and SBP became major shareholder with 90.31% stake.

In a high-level meeting chaired by Prime Minister Imran Khan, it was decided to place the matter before the Economic Coordination Committee (ECC) – the most appropriate forum to deliberate on the matter before finalizing the proposal.

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