MTB to sell 10% stake for Tk 1.73bn to Norwegian fund

Mutual Trust Bank or MTB will sell a 10 percent stake for about Tk 1.73 billion to a Norway government-owned equity player.

The company has decided to issue fresh equity shares in favour of Norfund or the Norwegian Investment Fund for Developing Countries, the bank said in a filing to the Dhaka Stock Exchange on Thursday.

Upon receiving consent from the regulatory authorities, the bank will issue more than 63.7 million shares or 10 percent of the total outstanding capital at Tk 27.19 each, including a premium of Tk 17.19, it said.

MTB shares rose as much as 9.76 percent in intraday trading, the steepest jump since Jan 22, 2017.

Norfund, a Norway’s Development Finance Institution, will nominate one member to the board of directors of MTB after completion of the sale.

As part of the sale process, the bank will convene an EGM on Nov 1 to issue fresh chares in favour of Norfund.

Norfund is an active strategic minority investor, wholly owned and funded by the Norwegian government. It was founded in 1997 by the Norwegian government.

By 2016, Norfund’s committed portfolio was $1.95 billion in more than 770 companies.

Norfund’s strategy is to invest in sectors and countries where it can have the greatest impact, where the private sector is weak and access to capital is scarce.

The priority geographical areas are primarily sub-Saharan Africa, but also some selected countries in South East Asia and Central America.

The Norfund invests in three sectors—clean energy, financial institutions and food and agribusiness. It also invests in private equity and venture capital funds that target small- and medium-sized businesses in need of early phase or growth capital.

MTB closed a term loan deal for $20 million with Norfund earlier this year.

The MTB reported a net profit of Tk 872.8 million for the first half of this year, a jump of 106.74 percent year-on-year.

The bank went into operation on Oct, 1999 under the leadership of Syed Manzur Elahi, one of the leading entrepreneurs and industrialists of Bangladesh. He is the chairman of Apex Group, a leading business conglomerate in Bangladesh.