960416

Billion r_upee

mandate signed

for ICI Pakistan

PTA plant

KARACHI: ICI Pakistan signed a letter of mandate for raising Rs 1 billion through redeemable capital in the form of Term Finance Certificates (TFCs) for the funding needs of the PTA plant being built at Port Qasim near Karachi. The Rs. 1 billion TFC issue has been underwritten by a consortium of financial institutions comprising of Muslim Commercial Bank Limited, Citicorp Investment Bank (Pakistan) Ltd, National Bank of Pakistan, and Faysal Bank Limited. The TFC issue will be structured and placed by Citicorp Investment Bank (Pakistan) Limited, and will include a pre IPO placement and a public offer. To date, 4 other companies have issued TFCs, out of which 3 are listed. ICI Pakistan's TFC will be the largest issue to date, and it is expected that this financial instrument will go a long way in developing the corporate debt market in Pakistan.

With the TFC mandate along with the Rs 1 billion term loan arranged through Pakistan-Kuwait Investment Company (Pvt) Ltd and ABN-Amro Bank, ICI Pakistan has completed the local currency debt funding requirement of Rs 2 billion for this year. Unlike other greenfield projects, the funding plan for ICI Pakistan's PTA investment does not envisage a conventional "financial close" as ICI Pakistan's strong Balance Sheet and healthy financial position will ensure availability of finances when needed. For 1997, the funding plan of the project requires an additional Rs. 1 billion of debt finance and Rs 1 billion working capital facility for which ANZ Grindlays Bank Pic will also be invited to participate. ANZ Grindlays Bank Plc are acting as advisors for all the local currency debt funding of the project.

The PTA plant for which the TFC's are being arranged, will use ICI proven technology that is currently employed in its plants around the world. It will cost US $ 450 million and will be the first in the local market, naturally enjoying the inherent advantage of being first with beneficial projection expected in November 1997. Major contracts totalling over US $200 million for engineering and equipment supply have already been awarded with over Rs 1 billion already committed in expenditures and contracts locally.

This plant will create 200 jobs when operational and will employ over 2000 people at the height of its construction activities. The 400,000 tonnes of PTA, an essential raw material for the Polyester Fibre and PET bottle polymer industry, will be manufactured to world standards and marketed locally with any small surpluses over local demand being made available to the international business network of ICI for supply to overseas markets.