Attock Cement Company Limited has planned to make investment in Cement Grinding Unit in Basra, Iraq. According to a notice sent by Attock Cement Pakistan Limited (ACPL) to Karachi Stock Exchange (KSE) that the company has an intention to invest about $25 million in new cement grinding unit in Basra, Iraq. As per calculation, the company requires total investment of Rs 2.46 billion.
"The board of directors of the company has approved the investment for putting up a Cement Grinding Unit in Basra, Iraq, subject to regulatory and other approval and compliance with all applicable laws, rules and regulations," the notice said. Muhammad Sarfraz Abbasi, an analyst at Summit Capital, said that the company presently had total cash and cash equivalents amounting to Rs 1.60 billion in its balance sheet. "We expect keeping other factors constant, the management might prefer to finance its new project partially by availing long term financing and remaining portion will be financed from its cash and cash equivalents. Thus borrowing and financing internal sources ratio would be 50:50".
Since, Iraq is an economy which is coming out of war and there is a huge potential for the reconstruction activities, it is expected this project to pay back well to the ACPL in coming years, he added. "However, since the project plan is at initial stage we are waiting for the further details from the company to evaluate impact of project on the earnings going forward," Abbasi said.