The management of Chakwal Spinning Mills Limited (CLOUD) has signed the term sheet for investment of Rs7.784 billion with PNO Capital Limited for the launch of data centre and cloud operations in Pakistan.

The listed company, which is currently a defaulter, shared the development in its notice to the Pakistan Stock Exchange (PSX) on Monday.

“In the light of decisions taken by the Board of Directors (BoD) of the company in their meeting held on 12th July 2024 and subsequent approval by the shareholders of the company in the EOGM dated 2nd August 2024, the management has signed the term sheet for investment of Rs7.784 billion with PNO Capital Limited for the launch of data centre and cloud operations in Pakistan,” read the notice.

It is pertinent to mention that PNO Capital is a pure play private equity fund with sectoral interests in tech and healthcare.

Meanwhile, CLOUD shared that out of the total investment, Rs500 million is in the form of equity subject to an equity injection of Rs400 million from sponsors and remaining amount of Rs7.284 billion is in form of convertible bond with maturity of 03 years and annual coupon of 10% (to be adjusted accumulatively at the end of tenor).

Moreover, the company has appointed Optimus Capital Management (Private) Limited as a financial advisor, it added.

The IT sector has emerged among one potential area of growth in the otherwise lackluster economy of Pakistan, with country’s information technology and IT-enabled services (ITeS) export remittances reaching an all-time high of $3.223 billion in the fiscal year 2023-24, a 24% growth as compared to $2.596 billion in 2022-23.

Last month, Mari Petroleum Company Limited (MARI), one of Pakistan’s largest E&P companies, said it was looking to step into the IT sector with the formation of a subsidiary focusing on cloud computing and artificial intelligence (AI).