Karachi December 28, 2021: Habib Bank Limited acted as a Lead Arranger & Advisor for the project financing agreement signed by banks with Fauji Cement and Askari Cement. The syndicated term finance facility results in additional 4.1 million tons of production capacity of cement in Pakistan. HBL has total signed the syndicate debt finance facility of PKR37.4 billion that will be the debt portion of expansion project carried out by both companies.
The Syndicated Term Loan facilities of Rs 37,400 million from a banking consortium is led by HBL. Other members of the consortium include Faysal Bank Limited, Bank Alfalah Limited, National Bank of Pakistan, Bank of Punjab, Bank Al-Habib, Askari Bank, MCB Bank Limited, Habib Metropolitan Bank Limited, Bank of Khyber and First Women Bank Limited. The credit facilities extended to both the companies have a tenure of 10 years and also include SBP concessionary finance facilities i.e. TERF & LTFF.
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The facilities with a combined project cost of circa Rs 60 billion (including a Debt component of Rs 37.4 billion) will be used by the companies to enhance their combined production capacity to 10 million tons per annum making them the second largest cement producer in the tegion. The expansion projects of FCCL & ACL are situated at DG Khan (Punjab) and Nizampur (KPK) respectively, and will play a significant part in the social uplift of the areas along with job creation.
The signing ceremony was attended by Waqar Malik, MD & CEO – Fauji Foundation Group, Qamar Haris Manzoor, Group CEO FCCL & ACL, Muhammad Aurangzeb, President & CEO – HBL, Arif Usmani, President & CEO – NBP, Atif Bajwa, Director & CEO – BAFL, Atif Riaz Bokhari, President & CEO – AKBL, Mohsin Ali Nathani, President & CEO – HMBL and representatives of BOP, MCB, FBL, BAHL, BOK & FWB on 27th December 2021 in Karachi.
Fauji Cement Company Limited (FCCL) would issue 800.5 million shares for every Askari Cement share as the equity swap ratio for the merger between the two cement makers is set at 5:1, which implies every one share of Askari Cement will be entitled to five shares of FCCL for the amalgamation between the two companies, a bourse filing said.
The entire undertaking of Askari Cement with all its properties, assets, rights, trademarks, patents, liabilities, and obligations will be transferred to and vest in Fauji Cement Ltd. Askari Cement will be dissolved in Fauji Cement without winding up its operations.
Askari Cement presently has 160.1 million outstanding shares. The post-amalgamation outstanding shares of FCCL would stand at 2.18 billion. “FCCL’s latest prices suggest that Askari Cement’s enterprise value is estimated at Rs31 billion. Post the amalgamation, the merged entity’s annual capacity would increase to 6.36 million tonnes.
Post-amalgamation, FCCL’s annual capacity would increase to 6.36 million tonnes. Moreover, both FCCL and Askari plan to further enhance their capacities by 2.05 million tonnes each, taking their overall production capacities to 10.46 million tonnes by FY24.
