Deal approved by NEC
THE National Executive Council has approved the sale of 5% of Independent Public Business Corp (IPBC) shares in Bank South Pacific to the International Finance Corp (IFC), The National reports.
Prime Minister Sir Michael Somare announced yesterday the IFC, a member of the World Bank Group, and IFC Capitalisation Fund, had agreed to take a 10% stake in BSP in an initiative that would promote the provision of loans to small and medium-size businesses in
“To facilitate IFC’s equity participation, the NEC has approved the sale of a 5% stake in BSP from the current 23.49% equity now held by IPBC,” he said.
“The NEC decision on Wednesday will result in the sale of almost 228 million BSP shares from its present holding of 1.07 billion shares.
“Following the transaction, the BSP stake will be reduced to 18.49%.
“The government’s decision to sell a portion of its shareholding in BSP followed detailed consideration and approval of the proposal by the IPBC board.”
Public Enterprises Minister Arthur Somare accepted the IPBC board’s recommendation and presented it to the NEC for a final decision.
In a separate but related transaction, BSP has also agreed to issue new shares to the IFC Capitalisation Fund that will give it an additional 5% equity to bring IFC’s overall equity in BSP to the requisite 10% level.
The US$3 billion IFC Capitalisation Fund was founded by IFC and the Japan Bank for International Co-operation (JBIC) as a global equity and subordinated debt fund that provides support to key banks in emerging market countries.