Investment of Rs2.08 billion secured by Dost Steels
Dost Steels Limited has entered into a restructuring agreement with a consortium of banks, backed by a substantial investment commitment from Muhabbat Khan and Zahir Khan. The two investors have pledged a total of Rs2.08 billion and offered personal guarantees to the lending banks for the repayment of the company's outstanding debts.
According to a notice filed by the company with the Pakistan Stock Exchange (PSX) on Thursday, the agreement will see Dost Steels paying back the consortium of banks in sixteen quarterly installments, spanning over a four-year period. Muhabbat Khan has already made an initial down payment of Rs50 million to the consortium banks.
Following this development, the share price of Dost Steels Limited rose to Rs9.21, marking an increase of Re0.07 or 0.77%.
It is worth noting that the company has been grappling with financial challenges that have halted its operations. The restructuring is aimed at stabilizing the company's financial position and potentially resuming operations.
Dost Steels Limited was incorporated in Pakistan in 2004 and is engaged in manufacturing steel, direct reduced iron, sponge iron, hot briquetted iron, carbon steel, pig iron, and special alloy steel in various forms.
The exact composition of the consortium of banks has not been disclosed in available reports, but the model suggests a collaborative effort between leading financial institutions to facilitate the restructuring.
- Muhabbat Khan and Zahir Khan, through their investment, have taken a specific position in the index of Dost Steels Limited's business affairs, with a substantial financial commitment towards restructuring and repayment of the company's outstanding debts.
- The four-year restructuring agreement, adopted to stabilize Dost Steels Limited's finances and facilitated by a consortium of banks, could potentially position the company for future investing opportunities once its operations are resumed.
