Key Takeaways
- Fauji Foundation will take control of 51% shares in Askari General and Life Assurance companies.
- Army Welfare Trust currently holds significant stakes in both insurers but is transferring shares to Fauji Foundation.
- The move does not change ultimate beneficial or economic control, according to company disclosures.
Fauji Foundation has been granted approval by the competent authority to acquire a 51% shareholding in two prominent insurance companies listed on the Pakistan Stock Exchange (PSX): Askari General Insurance Company Limited and Askari Life Assurance Company Limited. The Army Welfare Trust (AWT) is currently the major shareholder, with AWT holding 60.23% of Askari General and 66.65% of Askari Life Assurance.
According to disclosures made separately to the PSX, AWT will transfer its shares at a carrying cost of Rs. 17.06 per share for Askari General Insurance and Rs. 7.71 per share for Askari Life Assurance. Both companies stated that these transactions are not expected to result in an acquisition or merger, nor will they change the ultimate beneficial or economic control of their businesses.
Fauji Foundation is a charitable nonprofit organization established under the Charitable Endowments Act, 1890, while AWT operates under the Societies Registration Act, 1860. Both organizations fund their welfare activities through commercial investments and maintain administrative and financial control over their respective Committees of Administration.
The companies emphasized that the proposed transfers are part of a repositioning of shareholding within affiliated organizations, indicating no significant impact on market competition or ownership control. They stated that both AWT and Fauji Foundation will continue to operate independently with their own Committees of Administration overseeing operations.
Both Askari General Insurance Company Limited and Askari Life Assurance Company Limited have confirmed that the transactions remain subject to regulatory approvals and completion of legal formalities before they can be finalized. The companies are optimistic about the smooth execution of these transfers, which will see Fauji Foundation take a significant stake in their operations.
The move is seen as part of a broader strategy by AWT to restructure its investments and align them more closely with its charitable objectives. Fauji Foundation, on the other hand, aims to expand its portfolio through strategic acquisitions that support its mission of providing welfare services to the community.
Market analysts have noted that these transactions could potentially influence the insurance sector in Pakistan, particularly given the significant stakes involved. However, both companies remain confident that the transfers will proceed without disrupting their operations or market dynamics.
