Karachi October 2 2022: Hascol Petroleum Limited (HASCOL) has filed the approved draft Scheme of Arrangement (SoA) before Sindh High Court on 28th September 2022 for the settlement of PKR 53.4 billion outstanding liabilities, according to the company filing to the exchange.
Scheme of Arrangement (“Scheme”) envisages the rehabilitation of the Company by restructuring and settling the existing financial obligations / liabilities of the Company towards the Creditors (as defined below), in the manner contemplated under this Scheme along with implementing ancillary matters thereto. AND WHEREAS, this Scheme, if approved through a resolution m by the requisite majority of the secured creditors of the Company, along with the requisite majority of the members of the Company, and sanctioned by the Court by an order passed in this respect, is to be binding on the Company, along with all the members, creditors, stakeholders and any other regulatory / statutory bodies of or with respect to the Company.
Creditors will be provided with three options for the settlement of loan with options of (1) Long term restructuring option, (2) working capital restructuring option and (3) settlement option.
With respect to the Outstanding Liabilities, within 30 Thirty days from the Determination Date (the “Option Selection Date”), each Creditor shall select one of the Options for the purposes of settlement / restructuring of its portion of the Cut tending Liabilities due from the Company subject to the provisions of Schedule.
in the event that a Creditor does not select any Do ion by the Option Selection Date, unless otherwise agreed with the Company, It will be automatically deemed that such Creditor has selected Option C, and the Company shall carry out the Consequential Actions accordingly to effectuate the arrangement.
Within 5 (Five) days from the Option Selection Date, the Company shall inform all the Creditors of the Option selected (or deemed to have been selected) by each of the Creditors.
After the Option Selection Date, the Company shall proceed to prepare the Consequential Documents and take the Consequential Actions For the purposes of Implementing the settlement / restructuring arrangement based on the Options selected by the respective Creditors, which shall be carried out by the Long Stop Date.
The Creditors shall cooperate with the Company to enter into the Consequential Documents in accordance with the terms and conditions pertaining to the Options and carry out the Consequential Actions in timely manner, including provision of documents, certificates, financing lines etc., subject to compliance by the Company of the provisions of this Scheme.
Details of the outstanding Liabilities
| Serial No. | Name of Creditor | Outstanding Amount (PKR mn) |
| 1 | National Bank of Pakistan | 18,766 |
| 2 | Habib Bank Limited | 5,019 |
| 3 | Meezan Bank Limited | 4,070 |
| 4 | Habib Metropolitan Bank | 3,600 |
| 5 | Askari Bank Limited | 3,289 |
| 6 | Bank of Punjab | 2,887 |
| 7 | Sindh Bank Limited | 2,022 |
| 8 | The Bank of Khyber | 1,806 |
| 9 | Al Baraka Bank (Pakistan) Limited | 1,782 |
| 10 | Bank Alfalah Limited | 1,786 |
| 11 | Faysal Bank Limited | 1,756 |
| 12 | BankIslami Pakistan Limited | 1,550 |
| 13 | Dubai Islamic Bank Pakistan Limited | 1,277 |
| 14 | Samba Bank Limited | 972 |
| 15 | United Bank Limited | 747 |
| 16 | First Women Bank Limited | 655 |
| 17 | Privately Placed Sukuk | 500 |
| 18 | MCB Bank Limited | 401 |
| 19 | Summit Bank Limited | 375 |
| 20 | Paki Oman Investment Company Limited | 93 |
| 21 | First Habib Modaraba | 84 |
| Total | 53,419 |
Option A – Long Term Restructuring Option
| Feature | Details |
| Description | The portion of the Outstanding Liabilities due to each such Creditor shall be converted / rescheduled into a term loan (the “Term Loan”). |
| Tenor | Subject to the below, the tenor of the Term Loans shall be for a period of 12 (twelve) years from the Completion Date. |
| Structure | The Term Loan(s) shall be structured as 1 (one) or more standard bilateral / syndicated conventional facilities and / or Islamic long term facilities (for those Creditors which are Shariah compliant). |
| Return | Additionally, no costs, fees or other amounts may be charged to the Company (other than actual costs for entering into the Consequential Documents). Based on a tenor of 12 (twelve) years, repayment / payment of the Term Loans shall be made in10 (ten) equal annual instalments, with a grace period of 2 (two) years, commencing from the Completion Date. Having said that, in light of the objectives of the Scheme and the predicted cash flows of the Company, the collective repayment / Payment instalment amounts per year for all the Creditors that opt for Option A shall not exceed PKR 2,000,000,000 (Pak Rupee 2 Billion) Accordingly, in the event that the portion of the Outstanding Liabilities of the Creditors selecting Option A exceeds PKR 20,000,000,000/- (Pak Rupees Twenty Billion), the tenor of all the Term Loans shall stand extended in such manner that the amounts of the annual payments / repayment instalments (in equal instalments, after a 2 (two) year grace period) shall not exceed PKR 2,000,000,000 ‘- (Pak Rupees Two Billion). |
| Other Liabilities | All Other Liabilities shah stand irrevocably waived upon the implementation of the Option |
| Security | The Term Loan(s) shall be secured against specific fixed assets of the Company with a martin of 10% (Ten percent). The Creditors selecting such Option shall share such security on a first port passu basis inter se, for which purpose existing Creditors holding charges over such assets shall issue the requisite no objection certificates. Alternatively, if suggested by the counsel appointed by the Majority Creditors, existing charges over such fixed assets shall be vacated/discharged and a fresh security shall be created in favour of the creditors which have opted for Option A in a efficient and cost effective manner. |
Option B – Working Capital Restructuring Option
| Feature | Details |
| Description | The portion of the Outstanding liabilities (whether representing or pertaining to short-term or long-term facilities) due to each such Creditor shall be corrierted / rescheduled into new short- term working capital lines for the Company, in the amount equal to the full portion of the Outstanding Liabilities due to such Creditors (the “Working Capital Lines”). |
| Purpose | The Working Capital Lines !hail be utilized for the procurement of Petroleum Products and managing the day-to-day affairs of the Company. |
| Arrangement | The Company shall make payments in a rundown manner over a 60 (sixty) days horizon to open letters of credit for its business, having a 60 (sixty) days usance period. The same will be carried out in a phased manner such that the full amount of the Working Capital Lines are activated against which regular payments are mock on the respective due dates. |
| Structure and Terms | The Working Capital Lines shall be structured as 1 (one) or more running finance / working capital / L/C facilities and / or Islamic facilities (for those Creditors which are Shariah compliant). The Creditors selecting Option B agree and commit that the Working Capital Lines will be renewed / rolled over annually for a minimum period of 10 (ten) years from the date of execution of the Consequential Documents pertaining to this Option B. provided that the Company shall always keep the Working Capital Lines current. The Company will settle the entire outstanding Working Capital Lines, if required by the Creditors which have opted for this Option, after the expiry of the aforementioned 10 (ten) year period, or in the event of a default in keeping the Working Capital Lines current, upon earlier demand of the Creditors, in accordance with the provisions of the Consequential Documents pertaining too such facility (ies). |
| Return | The Working Capital Lines shall be made available to the Company through a minimum of 60 sixty) days import Usance Letters of Credit with zero margin. Additionally, no costs, fees or other amounts may be charged to the Company (other than actual costs for entering into the Consequential Documents). |
| Collection and Settlement | After activation/ regularization of the Outstanding Liabilities portion under this Option B, the Company shall keep the Working Capital Lines active through collection involving sale of imported / local refinery products and / or additional equity injection / sponsors’ loan on an ongoing basis. |
Option C – Settlement Option
| Feature | Details |
| Description | The portion of the Outstanding Liabilities due to each such Creditor shall be settled. |
| Arrangement | Subject to the below, the Creditors falling within this Option shall be paid up to. 30% (thirty aercent) of their respective portion of the Outstanding Liabilities ‘the “Settlement Amount”) as full and final settlement of all liabilities due to such Creditors (calculated as the present value of the Outstanding Liabilities offered under Option A above). Provided however that the total amount available to be offered by the Company to the Creditors under this Option C is limited to PKR 4,300,000,000/- (Pak Rupees Four Billion Three Hundred Million). Consequently, if the portior of the Outstanding Liabilities of the Creditors opting for Option C collectively exceeds such amount, the available cash amount will be distributed pro-rata to all Creditors opting for this Option C, which would result in a lower percentage of Outstanding .iabilities being paid, which shall still constitute full and final sedement of all Liabilities due to such Creditors. |
| Payment Structure | The same shall be paid on or before the Long Stop Date. |
| Structure | Subject to legal advice from the legal counsel preparing the Consequential Documents, `he parties shall enter into settlement agreements. |
| Release of Security | Upon receipt of the Settlement Amount, the Creditors shall release, vacate and discharge all Security interests over the Assets in the manner detailed in the Scheme. Furthermore, the Creditors shall provide all necessary documents and take such actions requested by the Company to release all such encumbrances within a reasonable period and without any delay. |
| Other Liabilities | All Other Liabilities shall stand irrevocably waived upon the implementation of the Optlnn. Additionally, no costs, fees or other amounts may be charged to the Company. |
