Engro to invest Rs7.6bn in a new PVC plant

Rs5.4 billion to be raised from issuance of right shares

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LAHORE: In a notification sent to the Pakistan Stock Exchange (PSX), Engro Polymer and Chemical Limited (EPCL) notified the bourse regarding financing structure of its expansion plan of PVC by 100,000 tonnes and debottlenecking by 50,000 tonnes, with a total estimated Capex (capital expenditure) of the project estimated at Rs7.6 billion, out of which Rs5.4 billion would be raised through right shares where share price of the proposed issue will not exceed Rs30 per share.

The notification read, “The aggregate amount of proposed right issue will be utilised to fund the addition of a new PVC plant of 100,000 MT and VCM plant debottlenecking of 50,000 MT per annum. The estimated overall CAPEX of the said project is approximately Rs7.6 billion, which is intended to be partially funded through the issuance of right shares of approx. Rs5.4 billion.”

According to the notification the new shares will not exceed a proposed price of Rs30 per share.

The notification apprised that the purpose of issuance of shares is to enable sponsors and investors of EPCL to obtain approval to invest in the potential right issue and provide an undertaking to the company to subscribe to its entitlement in accordance with the provisions of the Companies (Issue of Capital) Rules 1996, which would in turn approve and announce the actual right issue of shares.

Furthermore, the board resolved that it shall approve and announce the actual right issue at a future date in accordance with the applicable laws.

After the notification, EPCL’s share price increased 0.40 per cent, or Rs0.12, to Rs30.12 with a volume of 8.72 million shares traded at the PSX. Meanwhile, KSE 100 settled at 43407.72 points, down 210.36 points here on Wednesday.