KARACHI, September 20, 2024: The Board of Directors of the Fauji Fertilizer Bin Qasim (FFBL) in its meeting held on 20th September 2024 has approved the merger with and into the Fauji Fertilizer Company (FFC).
However, the merger is subject to approval of shareholders, secured creditors and other regulatory approvals. The FFBL has formally disclosed this in a notice to Pakistan Stock Exchange on Friday.
Previously, FFC in its board meeting held on 19th of July, granted an approval to evaluate the amalgamation of Bin Qasim into Fauji Fertilizer based on a scheme of arrangement. FFC after conducting the diligence to formalize this deal, has decided to announced scheme of merger. Both companies are part of the Fauji Foundation group and currently, the FFCL is the majority shareholder with around 49.88 percent in Bin Qasim.
According to announcement, in term of the scheme, it is intended, that the entire undertaking of the FFBL including its assets, liabilities, privileges, obligations, right and business will be merged, by way of amalgamation with and into FFCL and all the shares of the company will be cancelled in consideration for which an aggregate of approximately 150.87 million ordinary shares of FFLC shall be allotted and issued to the shareholders of the company (excluding to FFCL itself as a shareholder of the company), based on a swap ratio of 1 (one) ordinary shares of FFCL for approximately 4.29 ordinary shares of the company held by such shareholders of the company.
As a consequence of the merger, the company shall stand dissolved without winding up and delisted from PSX.
Fauji Fertilizer was started in 1978 when the company was incorporated as a joint venture of Fauji Foundation and Haldor Topsoe of Denmark for setting up of the first plant in Sadiqabad in 1982 with an annual capacity of some 570,000 metric tons, which was later rose to 695,000 metric tons. The primary objective of the company was to produce urea to be used by the farmers of the country.
FFBL started operation with an initial capacity of 551,000 MT of urea and 445,500 MT of DAP and 2023 results show that the company has crossed the Rs 200 billion mark in terms of revenues and earned Rs 33 billion gross profit. The company has some 56 percent of DAP share in the domestic market.
As per proposed amalgamation scheme Fauji Fertilizer would own 100 percent of Bin Qasim and investors who currently hold the shares of Bin Qasim will get an equivalent shareholding in Fauji Fertilizer.
After the merger Fauji Fertilizer will become the largest fertilizer company with estimated total assets of Rs 370 billion compared to Rs 231 billion of assets of Fatima Fertilizer and Rs 161 billion of Engro Fertilizer.#
