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SECP approves demerger of Allied Rental Modaraba
June 27, 2022 (MLN): The Security Exchange Commission of Pakistan (SECP) has approved the demerger of Allied Rental Modaraba, the company’s notice to Exchange said today.
“SECP has conveyed their “No Objection” on the proposed demerger of Allied Rental Modaraba”, the notice read.
The management of Modaraba said that it shall update the PSX and certificate holders of the Modaraba on the approvals of other regulatory bodies and fulfilment of other conditions necessary for the proposed demerger scheme.
Copyright Mettis Link News
Bykea raises $10mn funds to fuel growth
June 27, 2022 (MLN): Bykea, the local ride-sharing and delivery startup, raised $10 million from its existing backers to tap rising demand for online services in the country, reported Bloomberg.
Bykea, which focuses on two-wheeler rides, said in a statement Monday it plans to use the funds to extend its services, which include food and e-commerce deliveries, as well as cash pick-up.
The company’s investors include Prosus Ventures, MEVP, Sarmayacar, Tharros, and Ithaca Capital.
With 1.7 million active monthly users and more than 60,000 driver-partners, Bykea offers services in Karachi, Lahore and Islamabad. It’s among an emerging crop of Pakistani startups attracting attention from global venture investors as mobile services gain popularity in the country of more than 200 million people, it added.
“We see an enormous opportunity to serve the middle class by offering easy, affordable, and convenient transport and logistics solutions,” Bykea Executive Chairman Jonas Eichhorst said in the statement.
Pakistan’s fuel oil imports hit 4-yr high as it struggles to buy LNG
June 27, 2022: Pakistan's monthly fuel oil imports are set to hit a four-year high in June, Refinitiv data showed, as the country struggles to buy liquefied natural gas (LNG) for power generation amid a heatwave that is driving demand.
The resurgence in residue fuel demand at power plants underscores the energy crisis faced by the South Asian country and slows its efforts to switch to cleaner fuel.
Pakistan had cut fuel oil imports since the second half of 2018 as LNG prices were low, but it had to at times switch back to oil since July 2021 because of sky-high LNG prices.
The country's fuel oil imports could climb to about 700,000 tonnes this month, after hitting 630,000 tonnes in May, according to Refinitiv estimates. Imports last peaked at 680,000 tonnes in May 2018 and 741,000 tonnes in June 2017.
A spokesman for Pakistan's energy ministry cited global prices as the reason for the surge in fuel oil imports.
The trend is set to continue in July too, as Pakistan State Oil (PSO) received offers from Coral Energy to supply two high sulphur fuel oil (HSFO) cargoes and one low sulphur fuel oil (LSFO) cargo for second-half July delivery, industry sources said. PSO had sought five cargoes in the tender, according to its website.
"Import data indicates that thermal power generating companies in Pakistan made the initial switch from gas to fuel oil late last year and the price dynamic provides an ongoing incentive to max out fuel oil purchases over LNG," said Timothy France, a MENA senior oil analyst at Refinitiv.
Asia LNG spot prices jumped last week, tracking European gas prices, as an extended shutdown at a U.S. export plant prompted buying by Japan and South Korea.
Pakistan LNG, in its second attempt to buy four LNG cargoes for July delivery, received only a single supply bid for one cargo from QatarEnergy on Thursday.
Pakistan LNG, however, did not pick up the supply bid due to the cost.
The country, which is facing a severe energy crisis, has been in a conservation mode to reduce consumption and stave off blackouts.
"Weather conditions in Pakistan appear highly supportive of demand. Cooling demand typically remains high until mid-September, which implies that imports could remain elevated in June, July, and August," France added.
While fuel oil-based power generation was relatively steady year-on-year, it climbed 15% in May from the previous month, data from Topline Research showed.
Reuters
ISL commissions rewinding line with electrolytic cleaning section
June 27, 2022 (MLN): International Steels Limited (ISL) has informed that a state-of-the-art rewinding line with an electrolytic cleaning section has been commissioned which is part of the debottlenecking project to enhance the finishing capacity of Cold Rolled Coils and sheets by 120,000 tons per annum.
This will enable the company to expand its already strong footprint in automobile, appliances, and Tin Mill Black Plate (TMBP) segments of the cold-rolled steel market.
To recall, on March 9, 2021, the Board of Directors of the company approved a capital expenditure of Rs1.235 billion for the said debottlenecking project.
Currently, the stock of the company is trading at Rs57.88 [12:24], up by 99 paisa or 1.74% DoD.
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IRSA releases 16,642 cusecs water
June 27, 2022: Indus River System Authority (IRSA) Monday released 16,642 cusecs water from various rim stations with an inflow of 27,142 cases.
According to the data released by IRSA, the water level in the Jhelum River at Mangla Dam was 1,097.15 feet, which was 47.15 feet higher than its dead level of 1,050 feet whereas the inflow and outflow of water was recorded a 45,609 and 40,000 cusecs respectively.
The release of water at Kalabagh, Taunsa and Sukkur was recorded as 98,865 ,115,193 and 68,190 cases respectively. Similarly, from the Kabul River, a total of 27,900 cusecs of water was released at Nowshera and 27,142 cusecs released from the Chenab River at Marala.
APP
China Evergrande faces winding-up lawsuit in Hong Kong
June 27, 2022: A winding-up petition has been filed against embattled property developer China Evergrande Group at the Hong Kong high court, the judiciary's website showed.
The petition was made by "Top Shine Global Limited of Intershore Consult (Samoa) Limited", according to the website, and a hearing will be held on Aug. 31.
Evergrande did not immediately respond to a request for comment on the petition.
Reeling under more than $300 billion in liabilities, Evergrande's offshore debt is deemed to be in default after missing payment obligations late last year.
State-owned enterprises have stepped in to help with the debt restructuring process and have taken over some of its assets to quell market concern about a disorderly collapse.
The firm is expected to announce a preliminary restructuring plan by the end of July.
U.S. asset manager Oaktree Capital Management, a lender for Evergrande's development of a vast land plot in the rural Yuen Long district of Hong Kong, sought early this year to seize control of the land by appointing a receiver.
Evergrande in a filing at the time said the appointment of receivers and potential sale of relevant secured assets "would not have a material impact on the operations or financial position of the group, nor affect the group's ongoing debt restructuring exercise".
A person with knowledge of the matter previously told Reuters the developer would continue efforts to sell the undeveloped land even after the appointment of a receiver.
Reuters
Russia slides towards default zone as payment deadline expires
June 27, 2022: Russia looked set for its first sovereign default in decades as some bondholders said they had not received overdue interest on Monday following the expiry of a key payment deadline a day earlier.
Russia has struggled to keep up payments on $40 billion of outstanding bonds since its invasion of Ukraine on Feb. 24, as sweeping sanctions have effectively cut the country off from the global financial system and rendered its assets untouchable to many investors.
The Kremlin has repeatedly said there are no grounds for Russia to default but it is unable to send money to bondholders because of sanctions, accusing the West of trying to drive it into an artificial default.
Russia's efforts to avoid what would be its first major default on international bonds since the Bolshevik revolution more than a century ago hit an insurmountable roadblock in late May when the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) effectively blocked Moscow from making payments.
"Since March we thought that a Russian default is probably inevitable, and the question was just when," Dennis Hranitzky, head of sovereign litigation at the law firm Quinn Emanuel, told Reuters. "OFAC has intervened to answer that question for us, and the default is now upon us."
While a formal default would be largely symbolic given Russia cannot borrow internationally at the moment and doesn't need to thanks to plentiful oil and gas export revenues, the stigma would probably raise its borrowing costs in the future.
The payments in question are $100 million in interest on two bonds, one denominated in U.S. dollars and another in euros, which Russia was due to pay on May 27. The payments had a grace period of 30 days, which expired on Sunday.
Russia's finance ministry said it made the payments to its onshore National Settlement Depository (NSD) in euros and dollars, adding it has fulfilled its obligations.
Some Taiwanese holders of the bonds had not received payments on Monday, sources told Reuters.
For many bondholders, not receiving the money owed in time into their accounts constitutes a default.
With no exact deadline specified in the prospectus, lawyers say Russia might have until the end of the following business day to pay the bondholders.
SMALL PRINT
The legal situation surrounding the bonds looks complex.
Russia's bonds have been issued with an unusual variety of terms, and an increasing level of ambiguities for those sold more recently, when Moscow was already facing sanctions over its annexation of Crimea in 2014 and a poisoning incident in Britain in 2018.
Rodrigo Olivares-Caminal, chair in banking and finance law at Queen Mary University in London, said clarity was needed on what constituted a discharge for Russia on its obligation, or the difference between receiving and recovering payments.
"All these issues are subject to interpretation by a court of law, but Russia has not waived any of its sovereign immunity and has not submitted to the jurisdiction of any court in any of the two prospectuses," Olivares-Caminal told Reuters.
In some ways, Russia is in default already.
A committee on derivatives has ruled a "credit event" had occurred on some of its securities, which triggered a payout on some of Russia's credit default swaps - instruments used by investors to ensure exposure to debt against default. This was triggered by Russia failing to make a $1.9 million payment in accrued interest on a payment that had been due in early April.
Until the Ukraine invasion, a sovereign default had seemed unthinkable, with Russia being rated investment grade up to shortly before that point. A default would also be unusual as Moscow has the funds to service its debt.
The OFAC had issued a temporary waiver, known as a general licence 9A, in early March to allow Moscow to keep paying investors. It let it expire on May 25 as Washington tightened sanctions on Russia, effectively cutting off payments to U.S. investors and entities.
The lapsed OFAC licence is not the only obstacle Russia faces as in early June the European Union imposed sanctions on the NSD, Russia's appointed agent for its Eurobonds.
Moscow has scrambled in recent days to find ways of dealing with upcoming payments and avoid default.
President Vladimir Putin signed a decree last Wednesday to launch temporary procedures and give the government 10 days to choose banks to handle payments under a new scheme, suggesting Russia will consider its debt obligations fulfilled when it pays bondholders in roubles.
"Russia saying it's complying with obligations under the terms of the bond is not the whole story," Zia Ullah, partner and head of corporate crime and investigations at law firm Eversheds Sutherland told Reuters.
"If you as an investor are not satisfied, for instance, if you know the money is stuck in an escrow account, which effectively would be the practical impact of what Russia is saying, the answer would be, until you discharge the obligation, you have not satisfied the conditions of the bond."
EU countries to discuss options to jointly curb gas demand
June 27, 2022: European Union countries' energy ministers will on Monday discuss options for how they could jointly curb gas demand, as the bloc grapples with cuts to Russian supplies and prepares for possible further supply shocks.
"I plan to present to ministers the concrete steps that I believe we have to make, both at member states' side and the Commission's side, to be better prepared," EU energy commissioner Kadri Simson said on her arrival at the meeting of energy ministers in Luxembourg.
The Commission will present an EU plan to coordinate preparations for further gas supply shocks in July.
Reuters
LPG price hiked by Rs10 per kg
June 27, 2022 (MLN): The Oil and Marketing Companies (OMCs) have increased the Liquefied Petroleum Gas (LPG) by Rs10 per kg to Rs200 per kg.
The price of the LPG commercial cylinder has reached Rs9,532 after witnessing the hike of Rs455, while the price of the domestic cylinder has soared by Rs120 to Rs2,475.
It is pertinent to mention that the incumbent government, during its first two months, has reduced the price of LPG by Rs335 per 11.8-kilogram cylinder aimed at extending all possible relief to the common man amid the increased global-inflation scenario.
Soon after coming into power in April, the coalition government brought down the price of domestic products from Rs2,916.11 to Rs2,735.83 per cylinder for the month of May, extending an Rs15.27 per kilogram instant respite to consumers across the country.
In June, the government found more cushion and further slashed the LPG price by Rs154.48 per 11.8-kilogram cylinder which was highly appreciated by segments of the society, using the fuel, especially in far-flung areas where the gas companies’ networks did not exist.
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MARI performs post-acid test, reports double gas flows at Bannu West-l
June 27, 2022 (MLN): Mari Petroleum Company Limited (MPCL) has informed that a post-acid test has been performed at its exploratory well Bannu West-l ST-l in Bannu West Block, located in North Waziristan, KP, wherein the gas discovery size has increased to 50 MMSCFD while oil discovery size remaining unchanged at 300bopd, the company’s filing on PSX showed today.
The company performed test to understand the well's behavior and expected improvements in its performance parameters.
"The test rates were in the order of 50 MMSCFD of gas and 300 barrels per day of condensate at flowing wellhead pressure of 5,500 Psig at 40/64" choke size from the Lockhart formation."
The company had made a said gas/condensate discovery on June 01, 2022.
MPCL is the operator of Bannu West Block having 55% working interest along with OODCL and ZPCL as joint venture partners having 35% and 10% working interest, respectively.
The well, which was spudded in June 06, 2021, showed an initial gas flow rate of around 25 MMSCFD at Wellhead Flow Pressure (WHFP) of 4,339 Psi and around 300 BPD condensate at 32/64" choke size from the Lockhart formation prior to performing any acid treatment.
