The Board of Directors of Mari Petroleum Company Limited (MPCL) Wednesday approved the proposal to redeem the company's preference shares in two different phases. With the company's board having cleared the proposed phase-wise redemption process the ball now rests in the government's court to approve the move.
In the first phase, according to a stock filing, the company would be redeeming the shares which amount approximately to Rs 1.3 billion and are held by the minority shareholders. The company, in the second phase, would redeem its preference shares possessed by the government of Pakistan. The second phase would be completed what the MPCL said within prescribed time period of 10 years.
The company, however, is yet to approach the federal government to get its nod to the proposal its Board cleared in its Wednesday's meeting. "The said proposal is now to be submitted with GoP (Government of Pakistan) to obtain its no objection on redemption of preference shares held by minority shareholders," said Assad Rabbani, MPCL's company secretary. The matter then would be put up for the company's stakeholders in its upcoming Annual General Meeting. "The process of redemption will be started only after shareholders' and SECP's approval," the official said.
The oil and gas producing firm's move came in the backdrop of the Economic Co-ordination Committee's decision to abrogate the gas pricing formula the federal government had agreed with MPCL. Backed by the Ministry of Petroleum and Natural Resources, the dismantling of Mari Wellhead Gas Pricing Agreement (MGPA) has replaced the MGPA with a market oriented formula that was given a retrospective effect from July 1 last year.
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