The Gadoon Textile Mills Limited a listed company of the Younus Brother Group proposes to invest Rs270 million ($2.7m) in the Group venture Lucky Electric Power Company Limited (LEPCL) to set up 600MW coal-based power project in Karachi, on seeing the inadequate power supply facing by the Pakistan textile mills.
Some textile mills have been shut as they are running in losses due to inadequate power supply while jobs of millions of people also are at stake
Gadoon Textile would go on to hold one per cent shares in the power project through Lucky Holding Limited (LHL) by virtue of such an equity investment.
Gadoon Textile announced at the stock exchanges on Tuesday that it would recommend to the shareholders for approval of the investment in the forthcoming annual general meeting of the company.
With the approximate investment of $2.7m, Gadoon Textile would be the sponsor of Lucky Electric Power Company to be set up with huge project cost of $1.08 billion financed in the debt/equity ratio of 75:25.
Gadoon Textile told the investors that the company would continue to hold at least 1pc indirect stake in the project from the date of the Letter of Support (LoS) to the sixth anniversary of the commercial operations date of the project.
It was a requirement under the implementation agreement to be signed with government through the Private Power and Infrastructure Board (PPIB), for the sponsors to hold equity investment in lock-in period, the company observed.
The Gadoon Textile Mills stated that the information about the proposed investment in LEPCL was being conveyed to the investors under the requirements of Section 15-D of the Securities and Exchange Ordinance, 1969 and sub-clause xx of Listing Regulation No 35 of the Listing Regulations of the stock exchanges.