KARACHI, Dec 4: Pak-Arab Refinery Limited (PARCO) has floated its first public issue of term finance certificates worth Rs2.5 billion.

Of the total issue, Rs2 billion has been subscribed by banks, financial institutions and provident funds. The initial public offer (IPO) of Rs500 million will be available for subscription on Dec 12, 2001.

The TFC is being issued for additional working capital to finance the on-going operations and crude oil imports, said a PARCO official on Tuesday.

The certificates are for a three-year tenor and offer a floating profit rate of 1.45 per cent over the prevalent Pakistan Bond Market Rate, said an announcement of PARCO.

The floor rate will be a minimum 13 per cent and have a cap of 15 per cent profit. The repayment of the principal will be in two equal instalments between the 30th and 36th month with profit paid semi-annually.

The TFC offer has been arranged and advised by Global Securities, Habib Bank Limited (HBL), National Bank of Pakistan (NBP) and United Bank Limited (UBL) who have already had Rs2 billion placed privately with banks, financial institutions and retirement, provident/gratuity funds of large-scale employers.

And the banks to the issue are — NBP, UBL, HBL, Jehangir Siddiqui Investment Bank, Muslim Commercial Bank (MCB), Askari Commercial Bank (ACB) and Metropolitan Bank.

Subscription for TFCs will be entertained in multiples of Rs5,000, Rs25,000, Rs50,000 and Rs100,000.

The company says that its first offering is rated AAA.

PARCO, a joint venture of the government of Pakistan and Abu Dhabi, is an energy company with an asset base nearing Rs100 billion.