July 13, 2022 (MLN): Madian Hydro Power Limited (MHPL) has entered into an agreement with Pakhtunkhwa Energy Development Organization (PEDO) for the sale of the feasibility study for total consideration of Rs160 million and also received the sale consideration.
The aforesaid information was disseminated by Cherat Cement Company Limited (CHCC) who is a 50% shareholder of MHPL, through a notice to Exchange.
Thus, being a 50% shareholder of MHPL, Cherat Cement will eventually be entitled to 50% of the sale consideration after adjusting any cost and taxation impact in the event MHPL distributes the same, the notice said.
To recall, in May 2022, the Board of Directors of CHCC authorized the management of MHPL to negotiate and enter into an agreement for the sale of a feasibility study to PEDO.
MHPL was formed as a joint venture between Cherat Cement and Shirazi Investments Pvt Limited to build, operate and maintain a Hydro Power Generation plant at Madian, Swat.
MHPL has engaged international consultants to develop the feasibility study of the project which was approved by the Private Power and Infrastructure Board (PPIB) in 2008.
However, due to the deterioration in the law-and-order situation in Swat and adjoining areas, the construction work on the project could not be undertaken.
In view of the uncertainty involved, the management of the company was of the opinion that MHPL will not be a going concern in the foreseeable future and decided to record a full impairment loss on this investment in NHPL amounting to Rs107 million.
MHPL was subsequently approached by PEDO with the intention of purchasing the feasibility study for its own use at a price of Rs160 million.
