First Dawood Investment Bank Ltd. (FDIB) was incorporated on June 22, 1994 as Dawood Leasing Company Ltd. with a paid up capital of Rs.250M and in less than a decade its status was upgraded to that of an investment bank. It was listed on Karachi Stock Exchange against a public offering of Rs.95M, whereas the company received a subscription of over Rs.140M despite the then prevailing bearish market conditions, while today the outstanding share capital is nearly Rs.1.50bn. During the first thirteen years of business operations the balance sheet size peaked over Rs.12.0bn and it also showed consistent profits for 13-years and shared handsome returns with shareholders. FDIB successfully carried-out investment banking activities including, but not restricted to; financial advisory, underwriting of IPOs, investment in Pre-IPOs, secondary market operations, lease consortiums, lease financing, real estate construction, rental REIT model, trustee services to corporate bonds (TFCs & Sukuks) & mutual fund etc.
But the financial crisis of 2008/09 left daunting effect on FDIB. The liquidity crisis added with unprecedented closure of Pakistan Stock Market for 109-days (which has no precedent in this world) and the compelling Mufap pricing for corporate bonds resulted in abrupt withdrawal of credit lines from ‘Non-Banking Finance Companies’ e.g. over 55 banks & financial institutions demanded repayment of around Rs.10bn from FDIB. Thus FDIB was subjected to an uncalled for run by the its lenders & creditors.
In view of the above and with no respite available from government and the regulators, unlike bail-out packages offered for victims of 2008/09 in other parts of the world. FDIB presented and successfully executed a novel plan to settle its outstanding liabilities against its various assets (i.e. loans, leases, properties, TFCs, listed and unlisted shares etc) available on its balance sheet. The implementation of the idea has assisted ‘FDIB’ to settle with over 52-institutions for amounts valuing Rs.9.50bn (i.e. around 95% of total loans & advances) in 7-8 years and ‘FDIB’ has successfully come out of the debt trap without any external financial assistance. This is an unmatched feat in ‘Global Corporate World’. Now the borrowing are down to less than Rs.500M with merely four financial institutions. Here it is pertinent to mention that an independent inquiry report was made on the behest of ‘Securities & Exchange of Pakistan’ (SECP) in 2015, which has proven that financial crisis of 2008/09 in Pakistan was ignited from the SECP. In light of the above, FDIB plans to demand for the compensation at the right time.
After settlement and adjustment of its loans & liabilities, the balance sheet size of FDIB has reduced to less than Rs.1.5bn, but the net-worth is still compliant to meet the ‘Minimum Equity Requirement’ (MER) to successfully renew its ‘Leasing and Investment Finance Services’ licenses as per the new regime (Rs.150M required to meet ‘MER’). FDIB continues to remain buoyant to be back in business with same energy & vigor to innovatively provide business and financial solution to its market niche.
KSE Symbol: FDIBL
NTN No.: 0698109-7
Company Registration No.: K-05425
Member: Non-Banking Financial Institution – (NBFI)