Karachi, September 02, 2022: Hascol Petroleum Ltd (HASCOL) has formulated a comprehensive restructuring model with a plan to raise equity and reducing debt exposure.
This was disclosed by the management of the company during a corporate briefing session.
The proposed plan is to be shared with lenders and shall be implemented through a scheme of arrangement to be filed in Sindh High court.
It is worth adding here that the auditors of the company have expressed an adverse opinion with the Dec-2021 accounts, since the restructuring plan is yet to be formally presented in front of creditors.
The company’s proposed restructuring plan has four main components: converting Rs20bn into a long-term loan with a grace period and waiver for interest charges; restoring Rs20bn in working capital lines to support oil imports; settlement of banking loans (Rs15bn) at NPV of the long-term loan with upfront payments; and timely repayment of the various finance lease arrangements.
The proposed plan will require an injection of Rs 17bn. As of Dec-2021, the company operates a network of 667 retail sites, 19 of which are owned and controlled by Hascol.
It is pertinent to mention here that during CY21 the company witnessed a 44% YoY decline in Sales due to shortage of working capital lines. Other revenue of the company decreased during CY21 due to a decline in owned tank lorries and NFR (Non-Fuel retail) revenue.
This resulted in a loss of Rs7.6bn for CY21 (LPS: Rs7.6), compared to a loss of Rs23bn in the SPLY (LPS: Rs23.6).