Karachi: International Steels Limited (ISL) has disclosed its plans for a substantial equity investment and financial assistance to its associated company, Chinoy Engineering and Construction (Pvt) Limited (CECL). This strategic move involves the acquisition of 4,845,000 ordinary shares at Rs. 10 each, totaling Rs. 48,450,000, which represents 17% of CECL's post-issuance paid-up capital.
According to information available from the Pakistan Stock Exchange (PSX), this investment is part of a broader strategy to bolster CECL's financial standing and operational capabilities. Alongside the equity investment, ISL will extend various forms of financial aid to CECL. This includes a potential short-term loan of up to PKR 300 million at an interest rate of KIBOR + 3%, a corporate guarantee of up to PKR 1.5 billion in favor of Habib Bank Limited, and a performance guarantee related to CECL's contractual obligations with Reko Diq Mining Company Ltd (RDMC). The guarantees will also involve joint and several liabilities with International Industries Limited and Pakistan Cables Limited.
CECL, recently engaged in a project with RDMC to design and construct a Permanent Accommodation Camp at Reko Diq Copper Gold Mines in Balochistan, is expected to significantly benefit from ISL’s investment. This collaboration is projected to leverage CECL’s existing capabilities in construction projects, enhancing its financial and operational stability.
In line with these developments, the Board of Directors of ISL has recommended that shareholders approve these investment initiatives. An extraordinary general meeting (EGM) has been scheduled to seek shareholder approval through special resolutions. This EGM is set to take place on August 13, 2024, and will be accessible via video conferencing to accommodate all members.
To prepare for this significant meeting, the Share Transfer Books of ISL will be closed from August 6, 2024, to August 13, 2024. Shareholders must have their transfers registered by August 5, 2024, to be eligible to attend the EGM. Details regarding the meeting and the full investment proposal will be available electronically through PUCARS and on ISL's official website, as well as published 21 days prior to the EGM.
This series of strategic investments and financial arrangements by ISL is poised to enhance shareholder value and strengthen the company’s portfolio in the construction and mining sectors.