KARACHI: Adamjee Insurance Company has decided to acquire a stake in Hyundai Nishat Motor (Pvt) Limited (HNMPL), a joint venture of the South Korean car maker and Nishat Group, according to a notice sent to the Pakistan Stock Exchange (PSX) on Wednesday.
Subject to regulatory approvals, the board of directors has decided to invest Rs850 million in HNMPL by acquiring 85 million ordinary shares at Rs10 per share.
Besides, the insurance firm would issue a credit guarantee worth Rs1 billion in favour of HNMPL for 7.5 years.
"To arrange continuing Stand by Letter(s) of Credit (SBLC) for an amount of up to Rs1 billion for a period of 7.5 years starting from the date of issue of guarantee/SBLC in favour of financial institutions/lenders of HNMPL to secure financial assistance to be extended to HNMPL," the notice said.
Hyundai Nishat Motors raring to go, but hybrid vehicles on the back seat
The board also approved entering into agreements with joint venture partners, associates and others with regard to equity participation in HNMPL and related matters.
Adamjee Insurance's share price increased 1.80%, or Rs1.01, to close at Rs57.01 with 582,000 shares changing hands on Wednesday.
Nishat Group entered into an investment agreement with Hyundai Motor Company (HMC) earlier in February 2017. It will have production facilities in M-3, Industrial City, Sahinwala, FIEDMC, Faisalabad.