KARACHI: In an attempt to assuage the growing fears of investors, telecommunication company Telecard Ltd issued a press release on Tuesday saying it has the ability to pay off its outstanding loan of about Rs700 million “out of its own consolidated cash flows” under “restructured terms”.

The company had raised Rs2.4 billion through a term finance certificate (TFC) a few years ago. It’s paid back Rs1.7bn so far. The end-of-March financial accounts show “overdue instalments” of the TFC amounted to Rs736.2m.

“The company has been in discussions with its TFC holders for the said restructuring for the last few months. It has the support of its board and the TFC holders for the restructuring and is now in a position to quickly complete the formalities,” the press release said.

Telecard posted consolidated earnings of Rs334.7m in the first nine months of 2020-21 versus a net loss of Rs40.7m a year ago. Its share price has gone down 28.6 per cent since Sept 14 when it announced its intention to list one of its wholly owned subsidiaries, Supernet, on the Pakistan Stock Exchange (PSX).

“Creditors are expected to soon restructure TeleCard’s outstanding TFC loan of Rs700m, which would pave the way for the regulatory approvals for the planned IPO (initial public offer)…”

Besides addressing the investors’ concerns about its “financial capacity to settle the outstanding obligation,” the company also dispelled the impression that it would delay the upcoming listing of its subsidiary on the PSX.

“We see that an IPO of Supernet will help the company in accelerating its growth trajectory, expanding its business lines, and creating value for all stakeholders,” it said.

The loan was previously restructured in January 2016 with an expectation that it’d be repaid in full by December 2020. “However, due to challenging business circumstances faced by the company in that period, the liability could not be discharged,” it said, adding that the upcoming IPO of Supernet is in line with its efforts to seek new revenue streams and create fiscal space.

Its share price increased 7.5pc on Monday to Rs17.38 apiece.

Published in Dawn, September 29th, 2021