205 per ordinary share reduced to Rs 11946 and Rs 15530 as at

205 per ordinary share reduced to rs 11946 and rs

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205 per ordinary share (reduced to Rs. 119.46 and Rs. 155.30 as at December 31, 2012 and December 31, 2011 respectively consequent to bonus issues) calculated at the dollar rupee exchange rate prevailing on the business day prior to the date of the notices issued by IFC to exercise the conversion option. Such option is to be exercised within a period of no more than five years from the date of disbursement of the loan (December 28, 2009). Tranche B, however, is not convertible. The Holding Company, upon shareholders’ approval in the Annual General Meeting of February 27, 2010, has entered into an agreement with the Company that in the event IFC exercises the aforementioned conversion option (Tranche A), the loan amount then outstanding against the Company would stand reduced by the conversion option amount and the Company would pay the rupee equivalent of the corresponding conversion amount to the Holding Company which would simultaneously be given to the Company as a subordinated loan, carrying mark-up payable by the Holding Company for rupee finances of like maturities plus a margin of 1%. The effect of IFC conversion in substance would result in a loan from the Holding Company having the same repayment terms / dates as that of Tranche A. On December 22, 2010, the Company and IFC entered into an amended agreement for further disbursement of USD 30,000 thousand over and above the aforementioned disbursed amount of USD 50,000 thousand. The amount was fully disbursed as at June 30, 2011. The salient features of the Original Loan essentially remained the same. The additional loan of USD 30,000 thousand is divided into (i) 30% convertible loan on the shares of the Company at Rs. 41.67 per ordinary share calculated at the dollar rupee exchange rate prevailing on the business day prior to the date of the notices issued by IFC to exercise the conversion option and (ii) 70% non-convertible loan. The additional loan is repayable by September 15, 2017 in three equal installments and carries interest at six months LIBOR plus a spread of 6% or 10% depending on the listing status of the Company at December 31, 2012. During the half year ended June 30, 2013, IFC has clarified its position that, if an agreement in the proposed amendments to the loan conversion terms is not concluded by September 1, 2013 or if earlier, by the Company’s Initial Public Offer date the relevant loan spread increase will occur automatically effective, at a mutually agreed date. The exact terms and conditions of loan conversion are still under discussion with IFC, expected to be finalized shortly. The management is confident that it will be able to successfully negotiate the terms and hence no related provision for the differential amount of Rs. 244,879 thousand as at June 30, 2013 has been made in the financial statements for the half year ended June 30, 2013. The terms are in-principally agreed between IFC and Engro however the agreement is not yet signed.
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