KARACHI, May 7: The Sui Southern Gas Company (SSGC) on Tuesday signed agreement with consortium of banks for launch of its 5-year tenor second Term Finance Certificate worth Rs1,250 million.

The initial public offering (IPO) will be on June 1, 2002, said Mukhtar Ahmed, Managing Director of the Company while addressing the signing ceremony at company head office.

The lead advisers and arrangers for the second tranche of TFC are ABN Amro Bank, Muslim Commercial Bank and Jehangir Siddiqui & Co. There are 48 commercial banks, insurance companies, leasing, trust and funds in the consortium.

The managing director of the company said that the TFC will facilitate the company in raising funds for its Rs4.6 billion gas infrastructure rehabilitation and expansion project. Besides TFC, rest of the funds will be raised by the company through debt financing and own resources.

About the rate of return on the TFC, he said that 11.50 per cent will be floor rate while 16 per cent will be the maximum rate of return to investors.

The company had launched its first TFC in June 2001 which was worth Rs1 billion.

The SSGC MD said that the project will be completed in early 2003, which will help boost gas output capacity to 1 million cubic feet per day as against existing approximately 600 million cubic feet per day.

The SSGC recorded operating profit of Rs1.9 billion during July-March 2002 as against Rs1.5 billion during the same period last fiscal.—APP