Bank Makramah Limited (PSX: BML) has approved a comprehensive restructuring plan aimed at optimizing its shareholding structure and strengthening its capital base, following a board meeting held on January 26, 2026. The initiative marks a significant step in the bank’s efforts to improve its financial position, enhance market liquidity, and address long-standing liabilities through capital restructuring measures.
According to the company’s disclosure dated January 27, 2026, the bank’s Sponsor has agreed to revise the valuation of his shareholding under a previously approved restructuring framework. The Sponsor currently holds 861.16 million fully paid-up ordinary shares, representing 86.1% of the bank’s paid-up capital. Under the revised arrangement, these shares will now be valued at Rs6.25 per share, compared to the earlier valuation of Rs2.14 per share.
As a consequence of this adjustment, the Sponsor’s ownership stake will be reduced to 75.8%. To facilitate the implementation of this restructuring, Bank Makramah Limited will file a Scheme of Arrangement with the Islamabad High Court. Subject to court approval, the excess shares held by the Sponsor will be transferred and distributed among the remaining shareholders at no cost. This move is expected to enhance the bank’s free float and potentially improve shareholder value by broadening share distribution and increasing market participation.
The restructuring initiative also includes a parallel measure addressing the bank’s outstanding Term Finance Certificates (TFCs), which have remained unpaid since October 2018. The prolonged non-payment has been attributed to a combination of financial constraints, regulatory challenges, and adverse macroeconomic conditions.
To resolve this issue, the board has approved a plan to convert the total TFC redemption amount into equity. The conversion encompasses Rs1.50 billion in principal and Rs1.85 billion in accrued profit calculated up to December 31, 2025, resulting in an aggregate amount of Rs3.35 billion. This total will be converted into fully paid ordinary shares at a price of Rs6.25 per share, adjusted for a share reduction factor of 94.7341%, and allotted to TFC holders in proportion to their respective holdings.
Upon completion, the equity conversion is expected to increase the paid-up capital of Bank Makramah Limited by Rs3.35 billion. This is anticipated to significantly strengthen the bank’s balance sheet by reducing outstanding liabilities and improving its capital adequacy position. The conversion is also expected to provide relief from long-standing debt obligations while aligning the interests of creditors with the bank’s future performance as shareholders.
Market observers note that such restructuring measures are increasingly being adopted by financial institutions facing legacy financial stress, as they offer a pathway to balance sheet repair without immediate cash outflows. By converting debt into equity and redistributing shares, the bank aims to improve financial stability, enhance investor confidence, and create a more sustainable ownership structure.
The proposed restructuring and capital enhancement measures remain subject to regulatory approvals and, where applicable, consent from relevant stakeholders. The bank has indicated that further updates will be provided as the process progresses through judicial and regulatory channels.
The development reflects ongoing efforts within Pakistan’s banking sector to address capital constraints, legacy liabilities, and ownership concentration, amid a broader environment of regulatory oversight and evolving financial reforms.
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