PSO pays off short-term borrowings

KARACHI: Pakistan State Oil (PSO) has paid-off its short-term borrowings from banks as the company received Rs43.836 billion along with interest against maturity of Pakistan Investment Bonds (PIBs), the company subscribed in June 2013.

PSO informed the bourse on Monday that it subscribed the PIBs under the partial circular debt resolution plan of the government to settle its overdue receivable balance from power generation companies.

The face value of PIBs was Rs43.836 billion carrying an interest rate of 11.5 percent/annum. However, in order to finance the increasing receivables from power generation companies, PSO borrowed Rs43.836 billion from banks against these PIBs.

The bonds matured on July 19, 2017 and the Pakistan State Oil has received the entire amount inclusive of the semi-annual coupon payment. “The proceeds have been utilised to pay off PSO’s short term borrowings,” the notice said.  

“Given the cash starved situation of the company, we do not see any possibility of increased payout from this transaction as this transaction is also unlikely to improve the liquidity of the company,” Faizan Ahmed said in a report issued by JS Global. It may be mentioned here that as of June 30, 2017, the receivables of the state-owned oil marketing company stood at Rs284.6 billion.