KARACHI: In response to the story by Mushtaq Ghumman that appeared in the Business Recorder on July 26th, 2021, Hascol Petroleum Limited (Hascol) would like to inform that it is cooperating with the SECP to ensure transparency with respect to its financial reporting. Hascol did suffer significant losses in 2019, which were then declared in the Company’s financial statements. These losses were mainly related to Forex and Interest Rate Risk and extreme volatility in international oil prices, which affected Pakistan’s entire Oil Marketing Industry.
“With respect to oil pricing, Hascol has written a detailed response to the SECP earlier this year. The variations in OMC’s purchase prices can be attributed to different cost structures and procurement cycles. It is natural for various OMC’s to have different pricing for their imports based on a multitude of factors, including: oil price volatility, quantities being imported, Deemed B/L, pricing period, port congestion resulting in demurrage charges, and many other factors. International oil prices vary constantly, and sometimes especially in the period under review, this variation can be extremely volatile. The article gives the impression that Hascol was procuring petroleum products at higher prices in comparison to other listed companies, but generally Hascol’s petroleum purchases are competitively priced.
“In 2020, in an effort to turnaround the company and get it back on track, a new Chairman and CEO were appointed, to take the helm of Hascol and steer it back to profitability. The highly respected and experienced Sir Alan Duncan, a former UK Minister, was brought in as Chairman, bringing his considerable skills and experience from the oil industry. Adeeb Ahmad, a corporate investment and restructuring professional with an impressive track record was appointed CEO of Hascol.
“Both Sir Alan and Adeeb Ahmad are working tirelessly to bring Hascol back on a sustainable footing in coordination with the Board and the wider management. This task was made even more challenging due to the COVID-19 pandemic’s impact on Pakistan and the world. This was further compounded owing to Hascol’s significant outstanding debt levels, and resultant working capital squeeze.
“Due to the perseverance of the newly constituted Board and Hascol’s management team, supported by the Company’s business partners, Hascol is making progress towards ameliorating its financial position, and is hopeful of a positive outlook in the foreseeable future. The legacy of Hascol’s recent past, must be addressed however, and Hascol’s Board aims to deal with its regulators transparently and is prepared to make any adjustments, if ever required, to its financial statements.
“In order to solve its current financial issues, Hascol is in discussions with its banking partners on a financial restructuring plan for the company, having appointed a team of renowned restructuring experts from Alvarez & Marsal Europe LLP to assist. Hascol is committed to return to its successful trajectory in the near future”.–PR
Copyright Business Recorder, 2021
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