Kohat Cement Company Limited (PSX: KOHC) shareholders have approved a significant financial move by agreeing to provide a short-term running finance facility of up to Rs600 million to its associated company, Ultra Kraft (Private) Limited (UKPL). This financing will help UKPL meet its working capital requirements for one year, starting from October 29, 2024.
The finance will be provided at a mark-up rate of 1.50% above the three-month KIBOR (Karachi Interbank Offered Rate) or the company’s average borrowing cost, whichever is higher. As per the agreed terms, UKPL will repay the principal within 15 days of the end of each quarter, alongside the applicable mark-up. Any failure to meet the mark-up payment on time will result in an additional penalty of 5% per annum on the unpaid amount.
In addition to the financing decision, Kohat Cement also resolved to buy back up to 12 million of its own ordinary shares, which represent 6.13% of the total outstanding shares. The buyback will be executed through the Pakistan Stock Exchange (PSX) at the prevailing spot price during the purchase period, with payments made from the company’s distributable profits or reserves.
This strategic move reflects Kohat Cement’s continued efforts to optimize its financial structure and provide returns to shareholders, while supporting the operational needs of its associated company, UKPL.
