Engro Chemical Pakistan Ltd will issue domestic corporate bonds worth Rs 4 billion ($66 million) to help raise funds for its new fertiliser manufacturing facility, banking sources said on Thursday. Engro, Pakistan''s second largest urea fertiliser producer, has mandated JS Bank Ltd and Citibank to jointly manage Term Finance Certificates (TFCs), they said.
"The TFCs, proposed to be listed on the Karachi Stock Exchange, will have an eight-year maturity and will offer a floating spread of 1.55 percent over six-month KIBOR (Karachi Interbank Offer Rate)," a banking source, told Reuters.
"The total issue size is Rs 4.0 billion, comprising a pre-IPO (initial public offering) component of Rs 2.25 billion and an IPO of Rs 750 million, while there would be a greenshoe option of Rs 1.0 billion," the source said. The sources did not give any indication of when the issue would be launched.
The proceeds from the issue will be used to partially finance Engro''s plans to build a $950 million fertiliser manufacturing facility with an approximate capacity of 1.3 million tonnes per annum.