Mari Petroleum Company Limited (MPCL) Monday said to have redeemed preference shares held by the Government of Pakistan (GoP) and others along with profit for the applicable period and paid Rs9.718 billion to GoP on June 24 on account of redemption of preference shares.
Based on approval from SECP, Board of Directors, GoP and shareholders in the Extraordinary General Meeting (EOGM) held on June 23, the company highlighted that it had already redeemed the preference shares issued to the company's minority shareholders.
Early redemption of preference shares held by GoP and minority shareholders is a great achievement on part of the Company. With efficient management of cash flows, early redemption of preference shares will result in cost savings for the company, whereas, GoP has benefited in the shape of lump sum payment of Rs9.718 billion.
Effective July 01, 2014, the Economic Co-ordination Committee (ECC) approved dismantling of Mari GPA with the condition that the un-distributable balance as on June 30, 2014 amounting to Rs 9.67 billion would be surrendered to GoP and minority shareholders in the form of preference shares as "quid pro quo" for dismantling of Mari GPA.
In addition, Rs920 million provided for Mari Seismic Unit was also converted into preference share capital favouring GoP. These shares carried a profit rate of one year KIBOR + 3 percent and were to be redeemed within ten years. Accordingly, preference shares were issued to GoP and minority shareholders on June 19, 2015. It is worth mentioning, that this is the highest transaction ever made by MPCL in its financial history, which will help the Government in maintaining its cash flow.