Kohat Cement to invest up to Rs600mn in UKPL to meet working capital requirements

February 17, 2022 (MLN): Kohat Cement Company Limited (KOHC) in its upcoming extraordinary general meeting on March 21, 2022 will consider and approve investment by way of short-term running finance of up to Rs600 million in Ultra Kraft (Pvt.) Limited (UKPL), an associated company of KOHC.

According to the notice issued to the bourse, the investment will be approved to meet working capital requirements of UKPL for a period of one year from March 22, 2022 at a mark-up rate of 1.5% above three-month KIBOR or at the average borrowing cost of the company, whichever is higher.

This will be paid by UKPL within 15 days of end of each quarter and non-payment of mark-up within stipulated time period shall entail a further mark-up/penalty at the rate of 5% per annum on unpaid amount.

In addition, the company will also approve investment by way of issuance of Corporate Guarantee up to an amount of Rs400 million for a period of 7 years from the date of its issuance in favour of National Bank of Pakistan (NBP) to secure the long-term finances to be extended by NBP to UKPL.

The company shall charge commission rate at 0.12% per quarter or at the average commission rate charged to the company by commercial banks on a similar facility, whichever is higher, which shall be received quarterly within 15 days of close of each quarter and non-payment of commission within stipulated time period shall entail a further commission/penalty at the rate of 0.05% per quarter, the notice said.

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