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KARACHI: Engro Fertilisers Limited (EFERT) is set to issue 12.6 million shares of the company to International Finance Corporation (IFC) at the option price of Rs24 per share, totalling Rs302.2m, equivalent to $3m at the exchange rate of Rs100.7 per dollar.
The company secretary announced on Tuesday that in accordance with the disclosures in the offer documents of the company and in line with approval of its shareholders and a nod from the SECP, IFC had exercised its option to convert part of its convertible loan amount of $3m into shares of Engro Fertilisers.
At the market, the price of share in EFERT declined by Rs2.45 and closed at Rs76.54 on Monday. Investors worried over the dilution in the stock price following the increase in free-float at the market. Currently, the free float of the company is 15pc.
The SECP in its earlier approval on June 12, 2014 had stated that “the regulator was pleased to grant variation in issue of shares to the extent of rate of conversion ie Rs24 or the IPO price whichever is lower instead of Rs41.67 (or the IPO price whichever is lower).”
Engro Fertilisers Limited was demerged into a separate business by Engro Corporation on January 1, 2010. The company earned profit after tax amounting to Rs5.6bn on sales at Rs49.5bn for the year ended Dec 31, 2013.
Total assets of the company stood at Rs107bn with shareholders equity at Rs31.8bn.
For the quarter ended Sept 30, 2014, Engro Fertiliser posted profit after tax (PAT) at Rs2.14bn compared to Rs1.81bn in the comparable period of the previous year.
The company is making efforts to clear its balance sheet of debts. Finance cost in the quarter ended Sept 30, 2014, which amounted to Rs1.89bn were substantially lower than last year’s Rs2.47bn in same quarter, which the company attributed to “loan repayments, lower KIBOR and appreciation of Rupee against the dollar”.
In the directors’ report for the quarter and nine months ended Sept 30, 2014, the company CEO had stated: “As part of the re-profiling of its long-term loans in 2013, the company had agreed to sweep surplus cash (after debt servicing and capex) to its lenders at the end of 2014 on a one-off basis.
“With the improved performance, the company has implemented part of the sweep in June 2014, well before the scheduled time by paying an amount of Rs4.96bn which was over and above the normal scheduled repayments”.
Published in Dawn January 14th , 2015
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