Engro Corporation to sell its thermal assets to Liberty Power for Rs35 billion

KARACHI, PAKISTAN: Engro Corporation (ENGRO) has announced to sell its thermal power assets in what is being termed as one of the largest acquisitions in the nation’s recent history.

Engro Energy Limited (EEL), ENGRO’s fully owned subsidiary, has finalized agreements to divest its entire stakes in three key entities to Liberty Power Holding (Pvt.) Limited, a subsidiary of Liberty Mills Limited.

The stakes being sold include a 68.9% shareholding in Engro Powergen Qadirpur Limited (EPQL), a 50.1% shareholding in Engro Powergen Thar (Private) Limited (EPTL), and an 11.9% shareholding in Sindh Engro Coal Mining Company Limited (SECMC). The transaction values EEL’s shareholdings at Rs7.5 billion for EPQL, Rs21.04 billion for EPTL, and Rs6.21 billion for SECMC, totaling an impressive Rs35 billion.

The original cost of these thermal assets on Engro Energy’s books is estimated to be between Rs13-15 billion. Post-sale, Engro Energy is expected to record a pre-tax gain of around Rs20 billion. Following this, it is anticipated that Engro Energy will declare a dividend to ENGRO, which will carry no tax implications due to their wholly owned relationship. The after-tax dividend to ENGRO is projected to be between Rs27-29 billion, translating to Rs51-54 per share.

The completion of this deal, subject to regulatory approval and other customary closing conditions, is expected to take between 6-9 months. In the absence of major new projects, ENGRO is projected to distribute a one-time special dividend of Rs45 per share in 2025, potentially elevating the total dividend to Rs91 per share for that year.

This landmark transaction marks a pivotal shift for Engro Corporation as it repositions itself within the energy market, unlocking significant value for its shareholders and paving the way for future growth and diversification.

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