Saudi Pak Leasing Company Limited’s notice of extraordinary general meeting

Karachi, July 09, 2012 (PPI-OT): Enclosed please find a copy of the Notice of Extraordinary General Meeting of the Company to be held on July 31, 2012 for circulation amongst your members.

Notice of Extra-Ordinary General Meeting

Notice is hereby given that an Extra-Ordinary General Meeting of Saudi Pak Leasing Company Limited will be held on Tuesday, July 31, 2012 at 10:00 a.m. at Saudi Pak Tower, 61 -A, Jinnah Avenue, Blue Area, Islamabad to transact the following special business:

1. To consider and, if thought fit, approve the Term Sheet for the purpose of issue of Non-voting, non-cumulative, convertible unlisted Preference Shares otherwise than as right shares to Saudi Pak Industrial and Agricultural Investment Company Limited (SAPICO) and the Bank of Khyber (BOK) against their respective outstanding balances of subordinated loan and term loan to the extent of Rs 333,208,500/- (Rupees Three Hundred Thirty Three Million Two Hundred Eight Thousand Five Hundred) divided into 33,320,850 Preference Shares of Rs. 10/- each and Rs. 195,500,000/- (Rupees One Hundred Ninety Five Million) divided into 19,500,000 Preference Shares of Rs. 10/- each respectively and to pass the following resolutions as special resolutions with or without modification:

“Resolved that subject to required regulatory approvals, the outstanding subordinated loan balance of Saudi Pak Industrial and Agricultural Investment Company Limited (SAPICO) and the outstanding term loan balance of Bank of Khyber (BOK) be and are hereby converted into Non-voting, non-cumulative, convertible unlisted Preference Share Capital to the extent of Rs. 528,208,500/- (Rupees Five Hundred Twenty Eight Million Two Hundred Eight Thousand Five Hundred) and Preference Shares be issued otherwise than as right shares to these institutions in the following manner:

a) 33,320,850 Preference Shares of Rs. 10/- each to SAPICO and
b) 19,500,000/- Preference Shares of Rs. 10/- each to BOK.

Further Resolved, that the Chief Executive and the Company Secretary (the “Authorized Officers”) of the Company be and are hereby authorized and empowered, jointly or severally, on behalf of the Company to take all steps and actions necessary, ancillary and incidental in respect of issuance of Preference Shares including taking necessary permissions from the Regulatory Authorities, if any, and to sign, execute and amend such documents, papers, instruments etc., as may be necessary or expedient for the purpose of giving effect to the spirit and intent of the aforesaid resolution.”

The detailed term sheet, containing conditions subject to which these preference shares are to be issued, is being sent to the Shareholders along-with the Notice of the Meeting.

2. To consider and, if thought fit, approve the increase in Authorized Capital of the Company from Rs. 1,000,000,000/- (Rupees One Billion) to Rs. 2,000,000,000/- (Rupees Two Billion) and to approve the changes in relevant clauses of the Memorandum and Articles of Association of the Company and to pass the following resolutions as specia1 resolutions with or without modification:

“Resolved, that the Authorized Capital of the Company be and is hereby increased from Rs. 1,000,000,000/- (Rupees One Billion) divided into 100,000,000 Ordinary Shares of Rs. 10/- each to Rs. 2,000,000,000/- (Rupees Two Billion) through the creation of 100,000,000 Preference Shares of Rs. 10/- each.

Further Resolved, that Clause V of the Memorandum of Association of the Company be and is hereby amended follows:

The Authorized Capital of the Company is Rs. 2,000,000,000/- (Rupees Two Billion) divided into:

a) 100,000,000 Ordinary Shares of Rs. 10/- each; and
b) 100,000,000 Preference Shares of Rs. 10/- each with power to increase, reduce, modify, sub-divide, consolidate or reorganize the capital of the Company for the time being and to divide the shares into several classes in accordance with the provision of law.

Further Resolved, that Article 5 of the Articles of Association of the Company be and is hereby amended as follows:

The Company may have more than one kind of Share Capital and may have different classes of shares under each kind. The Authorized Capital of the Company is Rs. 2,000,000,000/- (Rupees Two Billion) divided into:

a) 100,300,000 Ordinary Shares of Rs. 10/- each; and
b) 100,000,000 Preference Shares of Rs. 10/- each.

Further Resolved, that the Chief Executive and the Company Secretary (the “Authorized Officers”) of the Company be and are hereby authorized and empowered, jointly or severally, on behalf of the Company to take all steps and actions necessary, ancillary and incidental in respect of increase in Authorized Capital along-with necessary amendments in the Memorandum and Articles of Association of the Company including taking necessary permissions from the Regulatory Authorities, if any, and to sign, execute and amend such documents, papers, instruments etc, as may be necessary or expedient for the purpose of giving effect to the spirit and intent of the aforesaid resolution.”

3. To consider and, if thought fit, approve the following amendments to the Articles of Association of the Company and to pass the following resolutions as special resolutions with or without modification:

Amendments in Articles of Association

“Resolved, that the Articles of Association of the Company be amended to incorporate in, amend, or delete certain clauses which are considered necessary for issuing further shares and providing enabling provisions for issuance of preference shares and to incorporate those clauses which are now being considered necessary as required under the prevailing laws and regulations:

1. Article 2 be amended as follows:

(a) After the definition of term ‘Chief Executive’ appearing before the definition of term Company’ the term ‘CDC’ may be added with definition reading as “CDC means a Central Depositor Company as defined in clause (cc) of Section 2 of the Securities and Exchange Ordinance, 1969 and registered with the Commission under Section 32A of the Securities and Exchange Ordinance, 1969”;

(b) After the definition of the term ‘Dividend’ and before the definition of ‘PTC’ the following terms be added:

‘Financial Statements’ means a balance sheet, profit and loss account, cash flow statement, statement showing changes in equity, accounting policies and explanatory notes;

‘Financial Year’ means the financial year of the company starting from July 1, in each calendar year to June 30 in the next following calendar year;

(c) After the definition of term “Office appearing before the definition of term “Register”, following definition of the term “Preference Shares” be added;

“Preference Shares mean shares which have priority in respect to payment of dividend and certain other rights and privileges when compared with rights and privileges of ordinary shareholders. These shares may be issued with or without stipulation on account of priority to rate and receipt of dividend being cumulative or non cumulative, rights with respect to dividend conversion Option, right to transfer etc.”

2. At the end of article 8, a proviso be added to read as follows:
“Provided that the Company may reserve a certain percentage of further issue for its employees under Employees Stock Option Scheme to be approved a by the Commission”.

3. The following new article as 8 (a) he added:

5. After article 26 (c) the following sub article be added as 26 (d):
“26 (d) Subject to provisions contained in the Ordinance the Company may issue preference shares to general public or lenders in satisfaction of debt or discharge of liabilities of whatever nature. These shares may be issued either as right shares or otherwise than as right.”

6. In article 36 the words “with the consent of all Members entitled to receive notice of a Meeting, or to attend and vote at any such Meeting” be deleted and replaced by the words “Subject to section159 of the Ordinance”.

7. In Article 38, for the words starting from ‘Five members till the words voting power’ be changed to ‘Not less than ten (10) members present personally who represent not less than twenty five per cent of the total voting power, either of their own account or as proxies’.

8. In article 53, at the end, the following be added as an instrument for appointment of Proxy:

1. The Share Transfer Books of the Company for the purpose of Extra-ordinary General Meeting will remain closed from July 24, 2012 to July 31, 2012 (both days inclusive).

2. A member entitled to attend and vote at the meeting is entitled to appoint another member as his/her proxy to attend and vote on his/her behalf. A Corporation being a member may appoint as its proxy any of its official or any other person whether a member of the company or otherwise.

3. An instrument of proxy or a Power of Attorney or other authority (if any) under which it is signed, or a notarially certified copy of such Power of Attorney, in order to be valid, must be deposited at the Registered office of the Company not less than 48 hours before the time of the Meeting.

4. CDC account holders will further have to follow the under mentioned guidelines as laid down by the Securities and Exchange Commission of Pakistan:

i) In case of individuals, the account holder or sub-account holder, shall authenticate his/her identity by showing his/her original Computerized National Identity Card (CNIC) or original passport at the tune of attending the meeting. The shareholders registered on CDS are also requested to bring their participants I.D. numbers and account numbers in CDS.

ii) In case of a Corporate Entity, the Board of Directors’ Resolution/Power of Attorney with specimen signature of the nominee shall be produced (unless it has been provided earlier) at the time of Meeting.

5. Members are requested to promptly notify any change of address to the Company’s Share Registrar, THK Associates (Pvt) Limited, Ground Floor, State Life Building No. 3, Dr. Ziauddin Ahmed Road, Karachi.

Statement of Material Facts under Section 160 (1) (b) of the Companies Ordinance, 1984 Regarding the Special Business

Issue of Preference Shares to Saudi Pak Industrial and Agricultural Investment Company Limited (SAPICO) and the Bank of Khyber (BOK) against their respective outstanding balances of subordinated loan and term loan (Agenda Item No. 1)

Due to the current financial position, it was unlikely for the company to meet its financial obligations towards its lenders. The company has therefore negotiated with lenders to convert their respective loans into preference shares. After successful negotiation with the lenders, the Board of Directors of the Company in their Meeting held on June 11, 2012 considered and approved the Term Sheet for the purpose of issue of Non-voting, non-cumulative, convertible unlisted Preference Shares to Saudi Pak Industrial and Agricultural Investment Company Limited (SAPICO) and the Bank of Khyber (BOK) against their respective outstanding balances of subordinated loan and term loan amounting to Rs. 333,208,500/- (Rupees Three Hundred Thirty Three Million Two Hundred Eight Thousand Five Hundred) and Rs. 195,000,000/ (Rupees One Hundred Ninety Five Million) respectively. The company now proposes to issue 33,320,850 Preference Shares of Rs. 10/-each and 19,500,000 Preference Shares of Rs. 10/- each to SAPICO and BOK respectively, and to pass a special resolution to this effect. The detailed term sheet is being sent to the shareholders along-with the notice of the meeting

Increase in Authorized Capital of the Company (Agenda Item No. 2)

In order to facilitate issuance of preference shares the authorized capital of the company is proposed to be increased from the current authorized capital of Rs 1,000,000,000 (Rupees one billion) divided into 100,000,000 ordinary shares of Rs. 10 each to Rs. 2,000,000,000 (Rupees Two Billion) through the creation of 100,000,000 preference shares of Rs. 10 each, the Board of directors have already approved the increase in Authorized Capital of the Company from Rs. 1,000,000,000/- (Rupees One Billion) to Rs. 2,000,000,000/- (Rupees Two Billion) through the creation of 100,000,000 Preference Shares of Rs. 10/- each.

Changes in Articles of Association of the Company (Agenda Item No.3)

1. Article 2 of the Articles of Association is proposed to be amended to incorporate certain definitions like “Central Depository Company”. “Financial Statements, “Financial Year”, “Preference Shares”.

2. Article 8 is proposed to be amended to provide for enabling provisions for the issue of shares to employees of the company under the employees stock option scheme.

3. Article 8a is proposed to be added to provide enabling provisions for issue of further shares otherwise than as right.

4. Article 14 is proposed to be amended to bring Articles of Association in consonance with the requirements of Central Depository Act/Rules.

5. In Article 26, a new sub article is proposed to be added to provide powers to the company to issue preference shares.

6. Article 36 is proposed to be amended to incorporate requirements of Section 159 of the Companies Ordinance, 1984.

7. Article 38 is proposed to be amended to change the quorum requirement for the general meetings.

8. Article 53 is being amended to incorporate instrument of proxy.

9. Article 75 is proposed to be amended to meet requirement of the Companies Ordinance, 1984.

10. Article 84 is being amended to include certain disqualification of directors.

11. Articles 84 and 89 are being amended to provide protection to preference shareholders for payment of dividend.

12. Article 100 is being amended to bring it in line with the requirements of the Companies Ordinance, 1984.

Term Sheet for the Proposed Conversion of Subordinated Loan and Term Loan into Preference Shares

Issuer
Saudi Pak Leasing Company Limited (“SPLC’ or the Company)

Issue
Non-voting, non-cumulative, convertible unlisted Preference Shares (“PS” or the “Issue”) to Saudi Pak Industrial and Agricultural Investment Company Limited (SAPICO) and to Bank of Khyber (BOK) against their respective outstanding balances of subordinated loan and term loan.

Purpose
To convert Subordinated Loan and partial Term Loan provided by the SAPICO and the BOK respectively into Preference Shares.

Issue Amount
Rs. 528,208,500/- (Rs. 333,208,500 to SAPICO + Rs. 195,000,000 to BOK)

Par Value / Issue Price
Rs. 10 per PS.

Mode of Offer
Issue to SAPICO against the outstanding balance of subordinated loan and to BOK against outstanding balance of term loan in the ratio of one PS for every 10 rupees of debt financing.

Term
5 years with an option to convert the same into Ordinary Shares.

Issue Date
July 31, 2012 (or later, required for completing the approval).

Year
The Company’s Financial year. i.e. 1st July to 30th June.

Preferred Dividend Rate
2.50% per annum on the Par Value (non cumulative).

Preferred Dividend Payment Frequency
Annually at the end of each completed year subject to availability of profit for the year.

Payment of Preferred Dividend
Out of the profits of that Year.

Mechanics of Payment
Dividend warrants in respect of PS shall he dispatched within thirty (30) working days of the date of Annual General Meeting of the Company. A working day is a day on which banks in Karachi are open for normal business with their customers.

Conversion
PS will be convertible at the option of SAPICO and BOK into ordinary shares.

Listing
PS issued will be unlisted with an option to be listed at time of conversion.

Rights of PS holders
The Preference Shares shall be entitled to:

1. Cash dividends in priority over any dividend to ordinary shareholders and holders of any subsequent issues.

2. In case of liquidation, the PS holders shall be entitled to preferred liquidation rights prior to ordinary shareholders.

3. Receive annual and quarterly financial statements of the Issuer.

The Preference Shares shall not be entitled to:

1. Receive notice, attend General Meetings of the Company and vote at Meetings of the Shareholders of the Company.

2. Bonus or rights shares, in case the Company / Directors decide to increase the capital of the Company by issue of further ordinary shares.

3. Participate in any further profit or assets of the Company.

Transferability
1. PS will be in registered form and can be transferred.

2. The Company will maintain or cause to be maintained a register of holders of PS.

Conditions Precedent to the issue
1. Board Resolution for the approval of the issue of PS.

2. Approval for the issue of PS by the Ordinary Shareholders.

3. All applicable regulatory approvals, including but not limited to the approvals from Karachi Stock Exchange and the Securities and Exchange Commission of Pakistan.

For more information, Contact:
Muhammad Ali Siddiqui
Company Secretary
Saudi Pak Leasing Company Limited
6th Floor, Lakson Square,
Building # 1, Sarwar Shaheed Road,
Saddar, Karachi- 74200, Pakistan
Ph: 111-888-999, (021) 5655181-5, 5655215-9
Fax: (021) 5210607-9