Share acquisition: Thal Limited to commence talks with SECMC stakeholders

Thal Limited (THALL) has decided to engage in discussions with the Pakistani shareholders of Sindh Engro Coal Mining Company Limited (SECMC) to acquire a portion of shares being offered by Habib Bank Limited (HBL).

THALL, engaged in manufacturing jute goods, shared the development in a notice to the Pakistan Stock Exchange (PSX) on Thursday.

“We have been made aware, through Hub Power Company Limited’s (“HUBCO”) disclosure letters, dated 16 January 2024 and 16 February 2024 and subsequent shareholders discussions, of HUBCO’s intention to acquire shares of SECMC, amounting to approximately 9.5% of the issued and paid-up ordinary share capital of SECMC, held by HBL,” read the notice.

Thal said that pursuant to the Shareholders Agreement, dated 17 August 2015, between, inter alia, the Company, HUBCO and HBL, it has decided to enter into discussions with the Pakistani shareholders of SECMC for the acquisition of a portion of the shares being offered by HBL, “in order to ensure that its shareholding in SECMC is not less than any other private shareholder of SECMC at all times”.

“The proposed acquisition is contingent upon execution of the relevant agreements, receipt of corporate/regulatory approvals and lender consents,” read the notice.

Earlier this year, the HUBCO entered into a definitive agreement to acquire additional 9.5% stake in SECMC held by HBL.

The acquisition would take Hub Power Company total holding in SECMC to 17.5%, making it the second largest shareholder in SECMC.

“This transaction is anticipated to have a positive impact on Hub Power Company profitability, contributing to an annualized impact Rs750 million,” Muhammad Amad, an analyst at Arif Habib Limited (AHL) said back then.

SECMC is Pakistan’s leading coal producer operating the country’s first open-pit lignite mine in Block II of Tharparkar area in Sindh province of Pakistan. With a current annual mining capacity of 7.6 million tons, it provides lignite quality coal to power producers in Pakistan.

The company is a joint venture between Government of Sindh (GoS), Engro Energy Limited (formerly Engro Powergen Limited) and its partners namely; Thal Limited (House of Habib), Habib Bank Limited (HBL), Hub Power Company (HUBCO); China Machinery Engineering Corporation (CMEC) whereas Houlinhe Open Pit Coal Mine, subsidiary of SPI (State Power International) Mengdong (SPIM), formerly CPIM, has joined the SECMC board as strategic investor with preference shares’ subscription.