Local firms to buy stake in Pakistan insurer

Two Bangladeshi companies have teamed up with the IFC, the World Bank's private sector arm, to buy stakes in the Eastern Federal Union (EFU) Life Insurance in Pakistan.
Eastern Bank, a local private commercial bank, and BSRM, a leading re-rolling steel mill, are the two who along with the IFC want to buy 50 percent shares of EFU, which will operate business in Bangladesh.
EFU is the Pakistan's largest private sector life insurance company with a countrywide branch network.
“We're in talks and it's very much in the process,” Ali Reza Iftekhar, managing director and chief executive officer of Eastern Bank, told The Daily Star.
“We've sent the draft memorandum of understanding to our respective lawyers.”
According to the proposal, Eastern Bank's stake will be 25 percent, IFC's 15 percent and BSRM's 10 percent.
If all parties agreed on critical issues, such as pricing, the buyers will go for the final deal.
“Eastern Bank and BSRM and IFC are supportive of inter-South Asia joint ventures, which is a strategic pillar for us,” said Per Kjellerhaug, country manager of IFC in Bangladesh.
Kjellerhaug said: “The insurance sector is strategically interesting for IFC.” However, he said the buy plan of EFU Life Insurance in Pakistan is still at an early stage and IFC has not yet made any decision.
IFC provides debt and equity financing to private sector companies, with special emphasis on private infrastructure, energy, manufacturing and services, health, education, banks and capital markets.
EFU is the pioneer in introducing the unit-linked products, critical illness products and education planning product.
Eastern Bank and BSRM are pioneers in their respective fields and listed on the stockmarket.