Byco Petroleum Pakistan Limited’s re-organization of loan and capital structure

Karachi: Byco Petroleum Pakistan Limited (BYCO) intends to re-organize its loan and capital structure that (i) Byco Oil Pakistan Limited (BOPL), which is an unlisted public company Incorporated in Pakistan and is a100% wholly owned subsidiary of Byco industries Inc. (BII), becomes the major shareholder of BPPL instead of BII, which is company incorporated under the Laws of Mauritius and which currently owns approximately 67.52% shares BPPL; and (ii) various Inter-company loans given to BPPL are novated to BOPL and converted into equity of BPPL.

This process is being achieved through the following steps:

A. Various associated company loans (local and foreign currency) availed by BPPL are novated such that BOPL replaces BPPL as the borrower.

B. In consideration for the novation of loans, BOPL (as the lender) and BPPL (as the borrower) will, owe BOPL such rupee equivalent amounts which prior to the novation of loans were owed by BPPL to its inter-company lenders.

C. The payment obligations under the BOPL-BPPL loan agreement, and another rupee loan agreement of a similar nature already entered into by BOPL and BPPL, will be satisfied by BPPL through converting the loan (Including accrued mark up thereon) into equity by issuing 585,754,341 new shares without a rights offering to BOPL.

The novation of the aforesaid associated company loans and the issue of Ordinary Shares at par at Rs.10.00 by BPPL without a rights issue pursuant to the first proviso to Sub-section 1 of Section 86 of the Companies Ordinance, 1984, have been approved by BPPL’s Board of Directors and shareholders at their meeting on 7th and 31st December 2010, respectively.

The proposed conversion of BOPL-BPPL loan into equity will significantly reduce the financial obligation of BPPL which in turn will not only improve liquidity position of the Company, but will also ease lender pressure. This conversion of loans into equity also demonstrates exceptional commitment of the sponsor towards the Company.

Upon completion of the step A-C listed above, BOPL will hold 850,510,099 shares of BPPL translating into 8.87% shareholding of BPPL. Please note that BPPL has already sought consent of its board of directors, shareholders, State bank of Pakistan, Competition Commission of Pakistan and Securities and Exchange Commission of Pakistan for the proposed novation and conversion of loans into equity.

For more information, contact:
Shahana Ahmed Ali
Vice President and head
Legal and Corporate Services
Company Secretary
Abdul Ghani
Chief Financial Officer
Byco Petroleum Pakistan Limited
The Harbour Front, 9th Floor, Dolmen City,
HC-3, Block 4, Marine Drive, Clifton,
Karachi – 75000,
Pakistan.
UAN: +9221 111 222 081
Fax: +9221 111 888 081
Web: www.byco.com.pk

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