Karachi April 8 2024: Agritech Limited to issue Preference shares, Zero Coupon PPFTC and Sukuks to clear its debt of PKR 48,000 million, according to company financials.
Agritech Limited continues to face a liquidity shortfall, as a result of which it was unable to meet its obligations in respect of various debt finances and is not in compliance with certain financial covenants. The details of overdue financial liabilities are as follows:
Agritech Limited, in order to streamline and to restructure its existing overdue long-term debts towards creditors (PKR 19.447 billion) and related markup (PKR Rs. 6.075 billion) as of 31 December 2013, developed a Comprehensive Rehabilitation Scheme in the form of a Scheme of Arrangement (“Scheme”) under Section 284 to 288 of the Companies Ordinance, 1984. Subsequent to approvals of the lenders and shareholders, the Scheme was settled with Honorable Lahore High Court (LHC) in June, 2016. LHC has sanctioned the Scheme on 03 June, 2022 with effect from 31 December, 2013.
The scheme envisaged the payment of Cash flows Available for Debt Servicing (CFADs) of PKR 1.65 Billion to the lenders as per the chosen options; issuance of preference shares in lieu of outstanding Long term Debts; issuance of Zero coupon PPTFCs & Sukuks in lieu of accrued markup with corresponding adjustment of markup payable outstanding on 31 December 2013.
In year 2023, subsequent to the approval of the scheme by LHC, the Company has achieved key milestones of reconciliation of balances with lenders, relevant amendments in Memorandum and Articles of Association, disbursement of CFADs of Rs. 1,649 million to the lenders, whereas new instruments (PPTFCs, Sukuks & Preference shares) are in process of issuance. Accordingly, related adjustments have been made in these financial statements.
The Company is in the process of implementing the
scheme and has disbursed the ‘Cash available for debt servicing’ (CFADs) amounting to PKR 1,649 million to entitled lenders and also has successfully increased
authorized share capital upto PKR 35,000 million.
The Board in its meeting held on February 12, 2024 has given the approval for the issuance of related instruments.
Accordingly, 1,854,269,750 number of preference shares (conventional / shariah compliant) with face value of PKR 10 each will be issued. Further privately placed term finance certificates amounting to PKR 3,602,395,000 and SUKUKS of PKR 1,464,330,000 will also be issued.
Subsequent to the sanction of the scheme by LHC and its implementation, the Company is condent that the suits filed by the Banks/lenders can be better defended in the relevant courts and the Company is confident for the positive outcome.
