Engro Corporation announced a 7.5 billion rupees investment in the telecommunications infrastructure

[ghazi52]

Engro Corporation, Pakistan’s leading industrial group famous for producing fertilizers and chemicals, has announced a 7.5 billion rupees investment in the telecommunications infrastructure sector of the country.

Engro Corporation has recently announced its first quarter financial results which ended on March 31st, 2019, at a meeting held at the Engro Leadership Academy. Recording a profitable quarter, total revenue of the company grew by 21% in comparison to the same period a year earlier, driven by higher Urea sales in the Fertilizer business. The company has also posted a profit after tax (PAT) of Rs. 3,832 million as compared to the last year, where it was PKR 3,146 million, translating into an EPS (Earnings Per Share) of PKR 7.32 per share.

As part of its long-term strategy after sighting a significant growth in revenue, Engro Corporation has streamlined its businesses in four verticals namely Food & Agriculture, Energy & Related Infrastructure, Petrochemicals, and Telecommunications Infrastructure to focus on creating value and helping Pakistan resolve these challenges.

Engro group’s investment in telecom infrastructure sector has been announced at a time when the telecom sector has been squeezed with the acquisition of Warid by Jazz and resulted in the convergence of telecom industry into four major companies i.e. Jazz, Ufone, Telenor, and Zong. Meanwhile, the growth rate of Pakistan’s telecom sector has been impressive as the increased number of 3G and 4G/LTE users contributed over $ 4.42 billion to the national exchequer from period 2014 to 2017.

Announcing the hefty investment in telecom vertical, Ghias Khan, President & CEO Engro Corporation stated;

“With a core purpose to solve the pressing issues of our time, the growth and prosperity of Engro is intertwined with the growth of Pakistan. Investments in energy, telecommunications infrastructure, petrochemicals, and food & agriculture can accelerate change, help towards increasing exports, the substitution of imports, industrialization in the country, job creation and hence build a stronger Pakistan. Engro Corporation will continue to explore investment opportunities across these four identified verticals with a focus to improve the lives of our stakeholders and communities in which we live and work with a culture founded on truth, trust and a relentless pursuit of excellence.”

Previously, Engro group had set up Enfrashare (Pvt) Ltd. to accelerate the development of the country’s connectivity infrastructure by providing an opportunity for people to be part of the new digital Pakistan. To further boost productivity, the Directors have approved an investment of PKR 7.5 billion into this project. As an initial investment, Enfrashare will engage in the acquisition & construction of shared telecom towers and will also provide telecommunication infrastructure & related services, including state of the art network monitoring solutions.

 

[ghazi52]

 

[Samlee]

Yes Engro Has A Massive Cash Pile To Invest Round About $600 Million.I Hear They Are Also Interested In Petrochemicals As Well Specially A Naphtha Cracker

 

[Goenitz]

they should clear their name from corruption cases first

 

[Syed1.]

they should clear their name from corruption cases first

Can you enlighten us which corruption cases you are talking about? A link would be handy rather than he said she said fairy tales. Thanks.

 

[Goenitz]

Can you enlighten us which corruption cases you are talking about? A link would be handy rather than he said she said fairy tales. Thanks.

bro it is very famous... Engro LPG terminal scandal... Pak govt daily pay .5 million dollar (for 2 terminals)
https://www.dawn.com/news/1168742

 

[ghazi52]

 

[AsifIjaz]

Well, as i look at it, engro won the contract via bidding by submitting a plan whch surpassed all others. Tgey constructed tge terminal in record time when very few were willing to come to pakistan for the same.
Now its like wind power plants, the initial few have the highest tarriff and once the ball is rolling u scale down the rates.
Now if government is utilizing less than 100 percent of the capacity then its the government who should be penalized not the company.... They construed something with X capacity with Y financing and BOP arranged with certain financial guarantees.
The same is the case with 2nd terminal and its onky now that pakistan has started negotiations for filling or utilizing the idle capacity of the 2 terminals

bro it is very famous... Engro LPG terminal scandal... Pak govt daily pay .5 million dollar (for 2 terminals)
https://www.dawn.com/news/1168742

 

[Zulfiqar]

Engro Corporation, Pakistan’s leading industrial group famous for producing fertilizers and chemicals, has announced a 7.5 billion rupees investment in the telecommunications infrastructure sector of the country.

Engro Corporation has recently announced its first quarter financial results which ended on March 31st, 2019, at a meeting held at the Engro Leadership Academy. Recording a profitable quarter, total revenue of the company grew by 21% in comparison to the same period a year earlier, driven by higher Urea sales in the Fertilizer business. The company has also posted a profit after tax (PAT) of Rs. 3,832 million as compared to the last year, where it was PKR 3,146 million, translating into an EPS (Earnings Per Share) of PKR 7.32 per share.

As part of its long-term strategy after sighting a significant growth in revenue, Engro Corporation has streamlined its businesses in four verticals namely Food & Agriculture, Energy & Related Infrastructure, Petrochemicals, and Telecommunications Infrastructure to focus on creating value and helping Pakistan resolve these challenges.

Engro group’s investment in telecom infrastructure sector has been announced at a time when the telecom sector has been squeezed with the acquisition of Warid by Jazz and resulted in the convergence of telecom industry into four major companies i.e. Jazz, Ufone, Telenor, and Zong. Meanwhile, the growth rate of Pakistan’s telecom sector has been impressive as the increased number of 3G and 4G/LTE users contributed over $ 4.42 billion to the national exchequer from period 2014 to 2017.

Announcing the hefty investment in telecom vertical, Ghias Khan, President & CEO Engro Corporation stated;

“With a core purpose to solve the pressing issues of our time, the growth and prosperity of Engro is intertwined with the growth of Pakistan. Investments in energy, telecommunications infrastructure, petrochemicals, and food & agriculture can accelerate change, help towards increasing exports, the substitution of imports, industrialization in the country, job creation and hence build a stronger Pakistan. Engro Corporation will continue to explore investment opportunities across these four identified verticals with a focus to improve the lives of our stakeholders and communities in which we live and work with a culture founded on truth, trust and a relentless pursuit of excellence.”

Previously, Engro group had set up Enfrashare (Pvt) Ltd. to accelerate the development of the country’s connectivity infrastructure by providing an opportunity for people to be part of the new digital Pakistan. To further boost productivity, the Directors have approved an investment of PKR 7.5 billion into this project. As an initial investment, Enfrashare will engage in the acquisition & construction of shared telecom towers and will also provide telecommunication infrastructure & related services, including state of the art network monitoring solutions.

Dawood group was going to acquire telecom towers via a company along with a malaysian investor. The deal got called off because of issues mentioned in below article.

We met the guys in Edotco and the bank that we worked for was interested in a small bilateral financing facility to cater to their tower acquisition program. However, the deal fell through because of the issues mentioned in the article.

It seems Dawood via Engro is going forward with this towershare business model.

https://dailytimes.com.pk/299550/ma...s-off-940m-towers-acquisition-deal-with-jazz/


https://www.technologytimes.pk/jazz-enfrashare-joins-development/

 

[Goenitz]

Well, as i look at it, engro won the contract via bidding by submitting a plan whch surpassed all others. Tgey constructed tge terminal in record time when very few were willing to come to pakistan for the same.
Now its like wind power plants, the initial few have the highest tarriff and once the ball is rolling u scale down the rates.
Now if government is utilizing less than 100 percent of the capacity then its the government who should be penalized not the company.... They construed something with X capacity with Y financing and BOP arranged with certain financial guarantees.
The same is the case with 2nd terminal and its onky now that pakistan has started negotiations for filling or utilizing the idle capacity of the 2 terminals

it was a corruption since beginning...shahid kaqan abassi was involved... if Govt can't utilise first terminal fully, why on earth we needed the 2nd one...

 

[AsifIjaz]

it was a corruption since beginning...shahid kaqan abassi was involved... if Govt can utilize first terminal fully, why on earth we needed the 2nd one...

Well engro terminal was the first terminal so that nullifies the fact that why was it built. I have stated above how and under what conditions / circumstances was it made.
Secondly i agree that the second terminal either needed to be delayed, capacity reduced or the capacity should have been utilized.
Lastly the ongoing investigations are MAINLY related to 1) Agreement for LNG supply 2) PSO agreement or body used for all the paper work etc

 

[valkyr_96]

Dawood group was going to acquire telecom towers via a company along with a malaysian investor. The deal got called off because of issues mentioned in below article.

We met the guys in Edotco and the bank that we worked for was interested in a small bilateral financing facility to cater to their tower acquisition program. However, the deal fell through because of the issues mentioned in the article.

It seems Dawood via Engro is going forward with this towershare business model.

https://dailytimes.com.pk/299550/ma...s-off-940m-towers-acquisition-deal-with-jazz/


https://www.technologytimes.pk/jazz-enfrashare-joins-development/

interesting which bank is that and what dept were you in? Towershare is the name of the company it consolidates towers, share them with subscribing partners turing their larger fixed costs into smaller operating costs, surplus towers are sold for scrap. It is possible that they might go at it alone under engro, this is the right thing to do. I think they were worried because towershare was bankrupt before it was acquired.

Well, as i look at it, engro won the contract via bidding by submitting a plan whch surpassed all others. Tgey constructed tge terminal in record time when very few were willing to come to pakistan for the same.
Now its like wind power plants, the initial few have the highest tarriff and once the ball is rolling u scale down the rates.
Now if government is utilizing less than 100 percent of the capacity then its the government who should be penalized not the company.... They construed something with X capacity with Y financing and BOP arranged with certain financial guarantees.
The same is the case with 2nd terminal and its onky now that pakistan has started negotiations for filling or utilizing the idle capacity of the 2 terminals

I am afraid it is not so simple https://www.dawn.com/news/1445060 as far as I have read here IMF does not want the government to meddle with this. This is just one example

 

[Zulfiqar]

interesting which bank is that and what dept were you in? Towershare is the name of the company it consolidates towers, share them with subscribing partners turing their larger fixed costs into smaller operating costs, surplus towers are sold for scrap. It is possible that they might go at it alone under engro, this is the right thing to do. I think they were worried because towershare was bankrupt before it was acquired.

I am afraid it is not so simple https://www.dawn.com/news/1445060 as far as I have read here IMF does not want the government to meddle with this. This is just one example

I am in a corporate banking department of a small provincial government bank. Don't want to disclose more as I sometimes post information related to government financing especially circular debt e.t.c and I don't want my posts here to impact my real life


I know about towershare (the main company), towershare PK and the general business model. I don't have the documents with me now but I went through the ownership structure documents last year. If I remember correctly edotco purchased either towershare PK or its subsidiary tanzanite. I will have to go through their filings again.

These guys edotco/axiata and generally all telecos have multiple chains of subsidiaries.

Edotco was to acquire deodar (a subsidiary) from mobilink via tanzanite IIRC.

Dawood group was to invest in the acquisition along with edotco.

Many banks were interested in syndicated financing for the acquisition deal. Had that deal gone through then mobilink would have offloaded 13000 towers.

We were offering a smaller bilateral facility due to SBP per party/group restrictions.

From this latest news I think they are going ahead again separately while edotco just keeps holding its 700 towers.

We would love to approach engro group but since that is parked in South so a separate team from Karachi might look into it (granted that we don't face per group exposure issue).

 

[AsifIjaz]

I am afraid it is not so simple https://www.dawn.com/news/1445060 as far as I have read here IMF does not want the government to meddle with this. This is just one example

The original post was about the LNG terminal and not the Thar plant. Thar plant was erected and commenced under strict conditions and benchmarks but other than that the project is an example of extravagant local spending and local / side expenses which were orchestrated from the helm for possible political gains or career in the future. It is for the same reason he was shown the door in the end. Hopefully some one will bring out the details one day.
Regarding the LNG contract and Pakistan's first LNG terminal i would stick to my point made earlier i.e. there was no one else willing to initiate a virgin project in the given timelines and of given capacity. The problem is that the governments realize it late that in order to initiate a chain reaction the incentives that they give initially are not sustainable in the longer run... this happened with IPPs set up in 90s, then with wind power projects and now lately with LNG terminals and motorways. The same will carry on till we have a sound financial and corporate sector based upon set principles and investor friendly but neutral guidelines. One that can not be twisted or relaxed for a particular project or a particular sector unless it has a win win result for the federation and the investor.

 

[valkyr_96]

The original post was about the LNG terminal and not the Thar plant. Thar plant was erected and commenced under strict conditions and benchmarks but other than that the project is an example of extravagant local spending and local / side expenses which were orchestrated from the helm for possible political gains or career in the future. It is for the same reason he was shown the door in the end. Hopefully some one will bring out the details one day.
Regarding the LNG contract and Pakistan's first LNG terminal i would stick to my point made earlier i.e. there was no one else willing to initiate a virgin project in the given timelines and of given capacity. The problem is that the governments realize it late that in order to initiate a chain reaction the incentives that they give initially are not sustainable in the longer run... this happened with IPPs set up in 90s, then with wind power projects and now lately with LNG terminals and motorways. The same will carry on till we have a sound financial and corporate sector based upon set principles and investor friendly but neutral guidelines. One that can not be twisted or relaxed for a particular project or a particular sector unless it has a win win result for the federation and the investor.

The original post was about Thar but you had thrown in some of your nuggets as well. "Now its like wind power plants, the initial few have the highest tarriff and once the ball is rolling u scale down the rates". My issue is with the highlighted and I have supported my argument from a person who benefit from the energy policy of PMLN and the recent news that IMF does not want the government to change these rates. Obviously, the trickle down effect is that we pay higher in electricity that is unsustainable (both in cost and dollar basis). The so called issue with the system is not investor friendly policies but the concentration of wealth, lack of entrepreneurial mindset because the wealthy are interested in managing their wealth and not growing it. Just look at our neighbor, they gave everyone an equal opportunity by properly implementing land reforms. As a result they perform better on indicators both agriculture and industrial. If the government would have initiated these projects even under PPP and offloaded it on to the stock exchange it would have been an easy buy because electricity gen companies are div paying stocks. They don't have R&D, marketing expenses. I have personally seen HCPC directors div out dollars by adding it to the cost of GE engine overhaul. All I heard was that it would be a hard sell when SBP audits but doable.
BTW if you read the article the other member had posted, LNG suppliers were not interested because of the circular debt issue and they were worried that they will not be paid. This all comes full circle. There are many ways to skin a cat. What you advocate for has ruined Pakistan.