- Just days ago, ECC of the Cabinet made this decision of removal of dividend cap to ensure that the divestment transaction generates optimum sale proceeds for the government.
The Economic Coordination Committee (ECC) decision to remove the dividend distribution cap on Mari Petroleum Company Limited (MPCL) will likely make the company attractive for the strategic investors, says analysts.
Just days ago, ECC of the Cabinet made this decision of removal of dividend cap to ensure that the divestment transaction generates optimum sale proceeds for the government.
As per Isamil Iqbal Securities, now as the cap is removed there is also a possibility for MARI to offer one-time bumper dividend as the company’s cash and cash equivalents at September 20 stood at Rs433 per share. While on recurring basis, MARI can potentially offer double digit dividend yield.
The meeting presided over by Minister for Finance and Revenue Dr Abdul Hafeez Shaikh on Wednesday received a summary from the Petroleum Division for removal of dividend distribution cap on Mari Gas Company Limited (MPCL) under Gas Pricing Agreement as the company is being considered for privatisation.
The ECC meeting further decided that the MPCL would ensure dividend distribution in accordance with the Provisions of Companies Act, 2017 and the Companies (Distribution of Dividends) Regulations, 2017.
As per Ismail Iqbal Securities, MARI is a top pick within the E&P sector due to its minimal exposure to circular debt as MARI’s major consumer is fertilizers sector which makes payments on time. “Early dividend cap removal would be a cherry on the top, which would attract liquidity and realise the upside potential quickly.”