KARACHI, Dec 6: Engro Chemical Pakistan has received Rs290 million, against its offer of Rs100 million TFCs to the general public, the company said in a press statement on Thursday.
The initial public offering (IPO) was held on November 26 and 27. The company observed that investors applying for one TFC of Rs5,000 or Rs25,000 or Rs50,000 would get their full allocation, however, those who applied for TFCs in multiples of Rs50,000 would get a pro-rata allocation.
Once the list of investors with their allocations or register is finalised instructions would be sent to the Bankers to the issue to make refunds for the oversubscribed amounts, the company said.
The total size of Engro TFC was Rs500 million of which Rs400 million had already been privately placed by Khadim Ali Shah Bukhari, the advisor to the issue, and Rs100 million was reserved for the public offering.
The company stated that a contributory reason that Engro had opted for the TFC route rather than the straight institutional debt as in the past, was because it was keen to play a participatory role in the development of the local debt capital market.
The current TFC should pave the way for future offerings by Engro as the company had an appetite and need for funds to finance various projects under contemplation, the company said. The strategy was also in line with the Government’s desire to see a more active debt capital market.
Salient features of the TFC include a tenor of five years, with principal amount being redeemed from the fourth year in four equal semi-annual instalments. The profit rate on the semi- annual coupon is a floating rate structure with a minimum rate of 13 per cent per annum and a maximum of 17 per cent per annum, based on the auction results of 5-year PIB bonds. Engro also maintains an option to call the TFC any time after three years at its par value.
The TFC has been rated AA- by PACRA which signified a very low expectation of credit risk backed by a very strong capacity for timely payment of financial commitments, the company stated.