Adamjee Insurance to acquire stake in Hyundai Nishat Motor

Board plans to invest Rs850 million by acquiring 85 million ordinary shares


Our Correspondent February 28, 2018
Board plans to invest Rs850 million by acquiring 85 million ordinary shares. REUTERS/Lee Jae-Won

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.

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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.

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