KARACHI: Oil company Hascol has hired a team of global professional services provider Alvarez & Marsal Europe LLP to overcome financial issues as it is engaged in tracing back possible false purchase entries in its balance sheet, it was learnt on Friday.
“In order to solve its current financial issues, Hascol is in discussions with its banking partners on a financial restructuring plan for the company, having appointed a team of renowned restructuring experts from Alvarez & Marsal Europe LLP to assist us,” the company said in a statement. “Hascol is committed to return to its successful trajectory in the near future.”
Vitol, the world’s largest independent oil trading company, has the single largest shareholding in the oil company. Hascol also missed sukuk payment in January, according to Bloomberg.
The new board of Hascol recently disclosed to the Pakistan Stock Exchange that they had possibly uncovered some fake purchase against fixed assets and the company was in the process of completing its investigation and see if there is any impact on the accounts.
“Unfortunately, some people have associated that with oil imports which is entirely baseless as all oil imports are managed through a well-structured and duly regulated process. These allegations are therefore spurious and Hascol reserves its legal rights to act against the sources of this disinformation,” said the company.
Hascol suffered significant losses in 2019, which were then declared in the company’s financial statements. These losses were mainly related to foreign exchange and interest rate risk and extreme volatility in international oil prices, which affected Pakistan’s oil marketing industry.
In 2020, in an effort to turnaround the company and get it back on track, a new CEO and chairman were appointed to take the helm of Hascol and steer it back to profitability. The highly respected and experienced Alan Ducan, a former UK minister, was brought in as chairman, bringing his considerable skills and experience from the oil industry.
Adeeb Ahmad, a corporate investment and restructuring professional with an impressive track record was appointed CEO of Hascol. Both Ducan and Ahmad are working to bring Hascol back on sustainable footing in coordination with the board and the wider management.
This task has been made extremely challenging especially in the current uncertain climate due to effects of the COVID-19 pandemic on Pakistan and the world as well as Hascol’s significant outstanding debt levels and working capital squeeze.
“Due to the perseverance of the newly-constituted board and management team, supported by the company’s business partners, Hascol is making due progress towards ameliorating its financial position, and board aims to deal with its regulators transparently and is prepared to make any adjustments, if ever required, to its financial statements,” said the company.
