Pakistan Cables Ltd successfully negotiates with Alambres Cables for the purchase of machinery

January 30, 2019 (MLN): Pakistan Cable Limited has issued its progress report on utilization of funds from the right issue of 25% made by the company on April 19, 2018, for the purpose of purchasing machinery, by offering 7,115,594 shares to the existing shareholders at a price of Rs. 160 per share (including a share premium of Rs. 150 per share).

According to the notice issued to the Pakistan Stock Exchange, the company has successfully negotiated with ALAMBRES Y CABLES TECHNICOS S.A., for the purchase of a continuous casting line for the manufacture of copper rod along with accessories.

Previously, the contract that had been signed with the seller included an advance payment of 33% for which the company had applied to the State Bank of Pakistan (SBP) on September 4, 2018 to obtain approval for making the advance payment via a Letter of Credit as recent regulations have come into place restricting processing of advance payments due to the company’s depleting foreign exchange reserves.

The company did not manage to get a response from the SBP hence the company renegotiated its contract with the seller for a full payment upon delivery rather than an advance payment.

“The FOB value of the line is $932,000 (Rs. 125 million) which shall be paid via an irrevocable Letter of Credit upon presentation of shipping documents by the seller” the report said.

The company anticipates such payment to be made by April 2019, subject to any unforeseen delays in the dismantling/packaging of the line by the seller.

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