Karachi: Pakistan Cables Limited has announced plans to invest in Chinoy Engineering and Construction (Pvt) Limited, seeking to acquire a significant stake and extend corporate guarantees to bolster financial stability.
The company has expressed intentions to purchase up to 4,845,000 ordinary shares at Rs.10 each, amounting to Rs. 48,450,000, which represents up to 17% of the post-issuance paid-up capital of Chinoy Engineering and Construction (CECL). This move comes as part of a broader strategy to diversify and enhance its market presence in the construction sector.
CECL, an associated company of Pakistan Cables, has also sought a corporate guarantee from Pakistan Cables to secure a financing deal up to PKR 1.5 billion with Habib Bank Limited. Additionally, CECL aims to issue a guarantee ensuring its performance in contractual obligations with Reko Diq Mining Company Ltd, with joint and several liability implications involving International Industries Limited and International Steels Limited.
According to information available from the Pakistan Stock Exchange (PSX), the Board of Directors of Pakistan Cables sees this venture as a strategic opportunity to maximize shareholder value. The board has recommended the shareholders approve this investment proposal during an Extraordinary General Meeting (EOGM), scheduled for 13th August 2024 at the Beach Luxury Hotel in Karachi.
The proposed investment and guarantees are expected to support CECL in its recent contract to design and construct a Permanent Accommodation Camp at Reko Diq Copper Gold Mines in Baluchistan. The company’s engagement in this project underlines its commitment to expanding its operations in promising industrial sectors.
Shareholders of Pakistan Cables will have the opportunity to vote on this significant financial decision during the EOGM, with the Share Transfer Books of the company set to remain closed from 7th August 2024 to 13th August 2024. The forthcoming notice of the EOGM will detail the specifics of the resolutions to be considered.