Blue-chip Engro Chemical Pakistan Ltd. said that a group has been accumulating its shares, but has not yet shown interest in taking over management or disclosed details of its holding.
In a statement…
Blue-chip Engro Chemical Pakistan Ltd. said that a group has been accumulating its shares, but has not yet shown interest in taking over management or disclosed details of its holding. In a statement to its shareholders, the company said its directors had expressed full confidence in the existing management and would like to maintain Engro as a stable and profitable organization. “The factual position is that a group of companies with a common director have been accumulating shares of Engro in less than a year, they have acquired a sizeable number of shares,” the statement said. It said one of the companies in the group was a competitor of Engro in the fertilizer business. “So far there has been no disclosure regarding an attempt to take over the management of the company (Engro), nor has any individual, company or group disclosed that they own or control 10% or more of the company“s shares, which the law requires,” it said. The statement said the situation had created uncertainty resulting in speculation, increased trading volume of Engro“s shares and volatility of the share price. Brokers at the Karachi Stock Exchange said Engro“s share had touched a year-high of Rs 122, compared with Rs 57 earlier in the year, amid speculative trade based on rumours of a takeover attempt. Engro was Rs 2.15 higher at Rs 104.15 after the statement was read out at the exchange. “The board of directors of Engro Chemical wish to express their full confidence in the existing structure and the management of the company. It is the endeavour of the board to maintain Engro as a high quality professional organisation,” the statement said. Engro Chemical, with a paid-up capital of Rs 1.21 billion, is regarded as blue chip at the bourse. The company has a fertiliser plant with annual capacity of 850,000 tonnes of urea, ensuring it a market share of 23%. The company has 50% stakes in two joint ventures – Engro Paktank Terminal Ltd., which runs a US$ 70 million bulk chemical terminal with a jetty at Karachi“s Port Qasim, and Engro Asahi Polymer & Chemicals, a US$ 83 polyvinyl chloride resin plant, also at Port Qasim. Japan“s Mitsubishi Corporation and Asahi Glass Company are Engro“s joint venture partners in Engro Asahi, scheduled to start commercial operations by the end of 1999. Engro Paktank, operational since last year, is a joint venture with Paktank Asia Pacific B.V., a subsidiary of Royal Pakhoed N.V. of the Netherlands. Engro Chemical posted a Rs 385 million after-tax profit for the year ending 30 June 1999, compared to Rs 486 million in the previous year.