Karachi: International Steels Limited (ISL) has announced plans to divest its entire 17% stake in Chinoy Engineering & Construction (Private) Limited (CECL), as detailed in a notice issued for the company's 19th Annual General Meeting. The meeting is scheduled for October 5, 2026, at the Beach Luxury Hotel in Karachi.

The decision to sell the 4,845,000 shares, which ISL acquired in August 2024 at PKR 10 per share, comes as part of a strategic move to mitigate business risks associated with the construction sector. The shares will be sold back to CECL at PKR 72.24 per share, yielding a total of PKR 350 million. This transaction is projected to generate a pre-tax gain of PKR 301.55 million for ISL.

According to information available from the Pakistan Stock Exchange (PSX), the disposal represents a significant move for ISL, allowing the company to crystallize substantial returns while addressing the logistical and financial risks linked to CECL's ongoing projects. The sale is pending necessary statutory and corporate approvals.

The proceeds from the sale are designated to be used for paying off bank borrowings, as outlined by the company's management. This decision is part of a broader strategy to enhance financial stability without impacting ISL's operational capacity. The shareholders' approval is sought for this transaction, which involves the sale of a substantial part of ISL's undertaking in compliance with Section 183 of the Companies Act, 2017.

The move is expected to offer quantitative and qualitative benefits to ISL's members, with management recommending the disposal to capitalize on the opportunity for higher returns amidst the volatile construction market.