Power Cement ‘re-profiles’ long-term obligations of Rs11.9bn

Power Cement Limited has reached an agreement with a local syndicate of banks to restructure its long-term obligations of Rs11.9 billion.

The company shared the development in a notice to the Pakistan Stock Exchange (PSX) on Monday.

“In the wake of rising inflationary pressures, high-interest rates and depressed local demand, Power Cement Limited (the Company) has finalised an arrangement with a local syndicate of banks to re-profile its outstanding long-term obligations of Rs11.9 billion,” read the notice.

The cement maker shared that the local syndicate of banks in respect of their long-term debt has favourably agreed on the following salient terms:

“Four biannual principal repayments due from July 2023 to January 2025 have been agreed to be reduced from Rs1.19 billion to Rs119 million each; Two biannual principal repayments falling due in July 2025 and January 2026 have been agreed to be reduced from Rs1.19 billion to Rs298 million each.

“The remaining principal amount of Rs10.8 billion has been agreed to be paid in eight equals biannual installments of Rs1.35 billion each (from July 2026 to January 2030).

“Previously, the diminishing musharakah was scheduled to be fully repaid in January 2028 while now, as a result of the above revision, the same is scheduled to be fully repaid in January 2030.

“Additionally, the profit margin of this diminishing musharakah has also been reduced by 100 basis points, for a period of three years from July 2023 to July 2026,” read the notice.

The company said that despite the challenges, it remains committed in maximising shareholders’ value and effectively minimising the impacts of adverse macroeconomic conditions.

Power Cement’s share was hovering at around Rs3.99 at the time of this report, a far cry from levels seen in 2021 when it was over Rs11.

Power Cement, formerly known as Al-Abbas Cement Limited, was acquired by the Arif Habib Group in 2010. By 2013, the name was changed to Power Cement Limited.

The company manufactures, markets and sells cement and has three cement manufacturing lines.