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Govt asks Chinese help to resolve conflict between HUBC, CPHCG

HUBC acquires Eni’s business in Pakistan
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November 25, 2022 (MLN): In order to resolve the conflict between China Power Hub Generation Company Ltd (CPHGC) and the Hub Power Company Ltd (HUBC), the federal government requested the Chinese authorities on Thursday to arrange a meeting of the Joint Energy Working Group (JEWO) at the beginning of next week, as reported by Dawn News on Friday.

On Thursday, the federal secretary of power met with the Chinese ambassador following a meeting of all stakeholders at the Prime Minister's Office, presided over by Mohammad Jehanzeb Khan, special assistant to the prime minister on government effectiveness.

To recall, on Wednesday 23rd Nov CPHGC served an encashment notice worth $150 million under the Standby Letter of Credit (SBLC), on the issuing bank provided by HUBC expiring on 23rd Nov’22.

On the aforesaid encashment notice by CPHGC, HUBC on Thursday initiated legal proceedings against the CPHGC on the advice of its legal counsel in order to safeguard the interests of its shareholders.

The analyst fraternity is of the view that CPHGC shouldn’t have called the SBLC, which will lead to a heavy financial burden on Hubco. That’s because the head of CPPA-G formally informed the CEO of CPHGC in a letter on Nov 18 that the Pakistan Energy Revolving Fund with a fiscal space of Rs50 billion was now fully operational and that it allowed withdrawals of Rs4bn per month against invoices starting from November.

“We’re pleased to inform you that the court has issued summons to the impleaded parties in the matter,” Source said.

At the time of writing, the scrip of the company is being traded at Rs65.47, which is down by Rs1.49 or 2.22% DoD.

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Posted on: 2022-11-25T13:28:50+05:00

 

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