After Shell has announced to sell its shareholdings, Taj Gasoline Ltd, a private oil marketing company with 61 retail sites in Sindh is all set to acquire at least 41% of Hascol Petroleum Ltd.
The acquisition will be made through a two-step process. First, Taj Gasoline will subscribe to new shares in Hascol Petroleum. Second, it will make a public offer to buy additional shares from minority shareholders. The price of the public offer will be equal to, or higher than, the price offered to the majority shareholders.
Shares of Hascol Petroleum are currently trading at Rs5.71 apiece on the defaulters’ counter of the Pakistan Stock Exchange.
Hascol Fiasco
Since 2018, the company has been facing financial fuss in the face of inaccurate entries in its financial records. In an attempt to address its financial challenges, the company has engaged in negotiations with all its lenders to restructure its total debt of Rs54 billion.
Currently, the company is in the process of seeking approval from its creditors for a plan aimed at rehabilitating the company through restructuring, rescheduling, settlement, and repayment of its financial obligations.
To restore the confidence of creditors, the company is considering an injection of fresh equity, approximately Rs2.34 billion, which would grant a 41% stake at the prevailing rate.
The main objective of the restructuring initiative is to replace expensive short-term debt with more affordable long-term debt, along with some additional equity. The company’s current liabilities significantly exceed its current assets, indicating its limited ability to repay loans that are due in the near future.
For the first nine months of 2022, the company incurred a net consolidated loss of Rs9.4 billion, compared to a loss of Rs4.3 billion in the previous year.
Vitol Group, a Swiss energy giant, is the company’s major shareholder, having increased its equity stake from 25% to 40% in 2020.
