ISMAIL DILAWAR

KARACHI: At least eight of the 32 institutional lenders of Dewan Cement Limited (DCL) have filed a winding-up petition in the court against the defaulting company, it emerged Tuesday.

DCL, a Yousuf Dewan company, owes to its lenders over Rs7.164 billion in aggregate. Of this total, the cement manufacturer has defaulted over Rs1.198 billion loans of certain banks and financial institutions which, DCL Tuesday said, had filed winding-up petitions against the company under Section 305 of Companies Ordinance 1984.

The day's second most-traded stock with 16.3 million trading turnover, the scrip rose from Rs16.12 to Rs16.40 at close on Pakistan bourse.

"We are aggressively contesting the winding-up petitions (in court)," DCL's company secretary Muhammad Hanif German is said to have told Abbas Mirza, a compliance officer at Pakistan Stock Exchange (PSX).

Apparently, the listed company disseminated the material information in response to a warning of suspension of trade in DCL's shares the front regulators at PSX made in their July 15th letter.

"Suspension by the Exchange at this stage will jeopardize our efforts to protect the interest of our valuable shareholders and other stakeholders," a DCL stock filing quoted German as saying.

Regretting for "inadvertently" missing out from its previous financial statements the price-sensitive information, the company secretary said that: "Various suits were filed against the company several years back for the recovery of aggregate amount of Rs 7,164.957 million".

Requesting PSX not to act adversely against the company, German said the court, despite a lapse of several years, had not issued the winding-up order. "It may be noted that 8 institutions out of 32 have filed winding-up petitions claiming approximately Rs1.2 billion," the official said.

The banks liabilities, he said, had been reduced by Rs1.8 billion from Rs8.865 billion outstanding in June 2008. He said to have got restructured Rs2.052 billion of the total debt and that Rs665.6 million had been paid under the agreed repayment schedule.

"This leaves with an un-structured loan of Rs5.67 billion," said German adding "We are at an advanced stage of negotiations with the lenders and the restructuring of the debt is in progress".

He also informed the regulators that the profitable DCL's equity as of March 2016 stood at Rs11.84 billion against the Rs7.06 billion debt.

The company official is said to have finalized strategic plans to address the issue. DCL is said to have appointed M/S More Solutions (Pvt) Limited to deal with the banks while M/S Next Capital has been engaged as transaction advisor.

A Steering Committee of the lending banks had been negotiating with DCL for the restructuring of the latter's un-restructured debt.