December 07, 2021 (MLN): Hascol Petroleum Limited (PSX: HASCOL) is nearing to conclude the negotiation with banks for a debt restructuring agreement as the company is carrying a heavy burden of accumulated debt, Sir Alan Duncan, Chairman of Hascol said in Annual General Meeting (AGM) held today.
Recently, the company and Vitol, the single largest shareholder of the company, had offered a settlement of Rs54.5 billion worth of debt, owed to different banks.
Sources told Mettis Global that servicing the debt has cost as much as the scale of its total losses. In order to address this, the company has been in detailed negotiations with its bankers.
Hascol has been seriously constrained by tight liquidity, and the company would not have survived without the continuing support of its major shareholder, he said.
“We believe we are nearing the conclusion of those negotiations and hope soon to be able to announce a restructuring agreement under which short-term expensive debt is replaced by long-term affordable debt and some new equity,” he stated.
He termed the year 2021 a dramatic year as the board has worked tirelessly to turn the company around.
“First, we have published the 2020 accounts, and in doing so we have cleaned them up and corrected some previous entries which did not meet our high standards. We are now working hard on the 2021 quarterly accounts, and hope to be up-to-date with them within a few weeks,” he added.
“Second, we have changed the company’s auditors.”
It is not just Hascol that has had a difficult year. The entire OMC sector has had a challenging time both with market conditions and with the regulatory environment.
“Many of the problems OMCs have faced have not been of their own making, and we are pleased that the Government has taken positive steps on forex protection and retail margins which should help all companies in the sector,” he noted.
While concluding, he said: “If and when we succeed in this refinancing of the company, the board is confident that it will mark the opening of a new and better chapter in Hascol’s fortunes, and equip it to be restored as a profitable concern.”
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