MCPL intends acquiring 87.5pc stakes in Dewan Cement

KARACHI: Mega Conglomerate Private Limited (MCPL), through their consultant BMA Capital, has expressed intention to acquire 87.5 percent stakes along with the management control of Dewan Cement Limited, a bourse filing said on Wednesday.

Following the notification, Dewan’s scrip surged 3.0 percent to close at Rs26.38 at the local bourse.

MCPL is the holding company with investments focused in the dairy and real estate sectors of Pakistan. “Financially strong with deep reserves, we are able to leverage our balance sheet effectively to allocate adequate financial resources towards any new strategic business venture we aspire to invest in,” says its website.

MCPL intends to acquire 363.085 million shares or 75 percent of the issued share capital through agreements with the sponsors of Dewan Cement while 60.514 million shares or 12.5 percent of issued share capital will be acquired through public offer.

MCPL has a majority shareholding investment in Haleeb Foods Limited. Moreover, Imperial Developers and Builders Pvt Ltd, a 100 percent owned holding of MCPL is engaged in the construction of a 30-storey LEED certified commercial building in Karachi. The development called Mega Corporate Tower has a total gross built area of 485,000 square

feet, with total rentable area of 247,000 square feet. Pakland Cement Limited and Saadi Cement Limited were acquired by Dewan Group in 2004 and 2005 and their names were changed to Dewan Cement Limited and Dewan Hattar Cement. In 2007, Dewan Hattar Cement Limited was merged into Dewan Cement Limited.

It may be recalled that in February 2017, Bestway Cement outbidding Lucky, Kohat and Fecto had entered into a non-binding memorandum of understanding with Dewan Cement for the proposed acquisition of its north plant (Hattar plant). However, the deal had not materialised.

As of June 30, 2017, Dewan Cement’s total assets stood at Rs30.267 billion against total liabilities of Rs13.88 billion, while company posted a net profit of Rs1.306 billion for the year ended June 30, 2017.

An analyst said acquiring a listed company had its benefits as the buyers could set their mind free in regard to correctness of disclosed information and with already existing capacity, the buyer’s cash flow would be comfortable from the day of acquisition.

A new cement plant would take at least two to three years to reach the gestation period. As per last available financial statements, MCPL posted a net profit of Rs1.317 billion for the year-ended June 30, 2015.