The mandatory offer made on the balance shares of the troubled Multi Finance PLC by its majority shareholder, Fairway Holdings (Pvt) Limited, ended last week with very little response from the minority shareholders.
The total number of shares for which acceptance of the offer had been received was 74, 065 ordinary shares, amounting to just 0.11 percent of the total voting rights of Multi Finance. The mandatory offer was given for 22.5 million shares at Rs.132.40 a share.
In a Central Bank-backed deal in February, Fairway Holdings acquired 64.63 percent stake in Multi Finance for Rs. 550.9 million through a private placement as the latter failed to meet the minimum capital required from a finance company in operation.
The acquisition triggered the Securities and Exchange Commission’s Takeovers and Mergers Code.
The then majority shareholders of Multi Finance, the controversial Entrust Holdings Limited and Entrust Limited, which failed to capitalize the company, was barred by the Central Bank from taking part in the private placement due to alleged irregularities.
The primary dealer under the Entrust Group is currently under investigation.
After the capital injection, the deposit and the borrowing ceilings imposed on the finance firm by the Central Bank is reported to have been removed.
As at March 31, 2017 Entrust Holdings held 29.9 percent stake in Multi Finance. Fairway Holdings holds 64.7 percent stake in the company post-mandatory offer.
Multi Finance experienced a run on its deposits as the company’s deposit base eroded 32 percent year-on-year to Rs.368 million as at March 31, 2017.
Multi Finance’s book value per share is Rs.13.1. The company has 63.6 million shares in issue.
For the quarter ended March 31, 2017, the company reported a loss per share of 70 cents, narrowing from a loss per share of Rs.1.88 during the corresponding quarter of the previous year.