In a strategic move, Dawood Hercules Corporation Limited (PSX: DAWH) has unveiled plans to undergo a demerger, splitting into two distinct legal entities while retaining its investment in Engro Corporation Limited (PSX: ENGRO).
The board of Dawood Hercules Corporation Limited approved the scheme of arrangement, a decision communicated to the Pakistan Stock Exchange (PSX) in a notice issued on Friday.
Under the proposed demerger, all assets, liabilities, and obligations of Dawood Hercules Corporation Limited, excluding its investment in Engro Corporation Limited, will be transferred to a new entity, DH Partners Limited (DHPL). Shareholders of Dawood Hercules Corporation Limited will receive shares in DH Partners Limited proportionate to their existing holdings in Dawood Hercules Corporation Limited.
Subsequently, shareholders of Engro Corporation, excluding Dawood Hercules Corporation Limited, will be absorbed into Dawood Hercules Corporation Limited. In return, they will receive 2.24 shares of Dawood Hercules Corporation Limited for each share held in Engro Corporation. This exchange ratio is determined by a predefined formula and may be subject to adjustments based on the actual shareholding on the issuance date.
Following the demerger, Engro Corporation will become a wholly owned subsidiary of Dawood Hercules Corporation Limited. To reflect this change, Dawood Hercules Corporation Limited is proposed to be renamed as ‘Engro Holdings Limited’.
However, the proposed restructuring is contingent upon obtaining necessary corporate and regulatory approvals, as well as the approval of the scheme by the Islamabad High Court.
