By: Spectrum Securities (Private) Limited
Being the highly leverage company, Pak Elektron Limited (PAEL) is seriously considering to minimize its debt burden therefore recently made a deal with NBP to swap its Rs3.2bn loan into equity. The company will issue 40mn share to NBP against the loan of Rs3.2bn. As per company notice to KSE the company will settle its outstanding Privately Placed Term Finance Certificate (PPTFC) with NBP subject to SECP and Shareholders approval. In this regard the company has scheduled an EOGM on July 23, 15 for shares holders approval after approval the company will request to SECP for endorse the said decision.
We believe that the said development would be finalized by mid-August and hopefully after 1HCY15 results announcement thus current record sales of refrigerators, ACs and transformers is expected to boost the 2QCY15 earnings. We believe the company to post the historical highest earning during 2QCY15 resulting positive movement in the share price and it could touch Rs110/share before the finalization of agreement price by NBP and PAEL.