ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has issued no objection certificate (NOC) for restructuring of bank loans given to Azgard Nine Ltd (ANL).

The Corporate Supervision Department of SECP maintains a ‘Register of Mortgages’ that contains the information related to assets mortgaged by the registered companies.

An SECP official said that under the Companies Law the creditors who have up to 75 per cent of the loan amount can seek restructuring, adding that after the scrutiny of papers the commission has granted the NOC to the banks.

The commission was sent a notice by the Lahore High Court (LHC) that the 14 financial institutions led by Bank Al Baraka wanted to restructure their loans given to ANL.

The banks and the ANL management have entered a scheme of arrangements and a loan restructuring case has been filed at the LHC.

The liabilities of ANL have risen to Rs12.25 billion exceeding its total assets and it is expected under the arrangement Rs4.25bn would be restructured, which is overdue.

The overdue includes Rs1.5bn in terms of redeemable capital, Rs1.63bn of short-term borrowing, Rs806m out of the long-term borrowing and bills amounting to Rs275.95m, according to the first quarterly report of ANL.

The company has stated that these conditions cast doubt about the company’s ability to continue as a going concern.

“The company [ANL] could not make timely repayments of principal and related mark-up of long-term debts. Consequently, there has been non-compliance with certain financial and other covenants imposed by the lenders,” the ANL has said.

Published in Dawn, February 25th, 2018