KARACHI: Hub Power Holdings Limited (HPHL), a wholly owned subsidiary of The Hub Power Company Limited, has entered into a shareholders agreement with Mega Conglomerate (Private) Limited (MCPL), pursuant to which MCPL will subscribe to and become a fifty percent (50%) shareholder of Mega Motor Company (Private) Limited.
The rational of the transaction is to consolidate the expertise of both HPHL and MCPL and strengthen the business venture with BYD Auto Industry Company Limited, material information sent to Pakistan Stock Exchange on Thursday said.
The consummation of the shareholders agreement is subject to the necessary regulatory approvals and consents.
Mega Motors has entered into a supply and manufacturing agreement, as well as a technical license agreement, with BYD Auto Industry. Additionally, the company finalized a distribution agreement in June 2024 to introduce and sell BYD vehicles in Pakistan.
BYD, a publicly listed Chinese multinational conglomerate, is the world’s largest manufacturer of electric vehicles. In 2023, BYD achieved sales of 1.57 million battery electric vehicles, reflecting a 73 percent YoY increase, alongside 1.44 million units of plug-in hybrid vehicles.
“We have run a sensitivity analysis on volume and price to assess the impact on HUBC,” Rao Aamir Ali, an analyst at Arif Habib Limited said.
“Assuming an average price of Rs 11.1 million/unit and 10 percent net margins, the bottom-line impact on HUBC’s earnings ranges from Rs 2.1/share to Rs 4.3/share with sales volumes of 5000 to 10,000 cars per annum.”
Copyright Business Recorder, 2024
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