Engro Corporation will invest Rs2.5 billion in Thar Coal Power Project. In turn, Engro Corporation will be given 17% stake in Siddiqsons Energy which is manufacturing 330MW That Coal Power Plant in Sindh.
Engro Corporation said, “The board of directors of the company resolved to invest up to $21.375 million by way of subscriptions of ordinary shares in Siddiqsons Energy Limited, a special purpose vehicle (SPV), set up to develop approximately 330MW of Thar coal-fired power generation facility in Block-II, district Tharparkar, Sindh on a build, operate and own basis. The company, Siddiqsons Limited and Arif Habib Equity (Pvt) Limited have further entered into a joint venture agreement to set forth the terms and conditions governing their relationship and to record their respective rights and obligations in relation to the management and functioning of the SPV and incidental matters relating to the SPV.”
As per a Topline Securities analyst, Shankar Talreja Engro’s equity share in the project will be 17%. The cost of the project will be around $500 million with the debt-equity ratio of 75% and 25%. Chances are that the project will begin in 2021 and “will have minimal impact of around Rs1‐1.4/share to the bottom line of the company,” as per Talreja.
In 2014, Siddiqsons Energy Limited was formed with the aim to enter power generation business. In 2017 it relocated its highly critical coal power plant to Thar from Port Qasim. The reason for the shift was to restrict the transport cost. But the relocation will affect that plant’s production capacity from 350MW to 330MW.
It is pertinent to mention here that in the food sector, Engro Foods is considered the best organization to work for with its amazing employee packages, the deliverance of the best quality of human capital.