American Depository Receipts to be floated
Fatima Fertiliser Company has announced plans to float American Depository Receipts.
KARACHI:
Fatima Fertiliser Company has announced plans to float American Depository Receipts (ADRs) in the US financial markets in an apparent bid to secure finances.
“The board of directors has approved issuance of Level-1 American Depository Receipts subject to regulatory approvals,” the company said in a notice sent to the Karachi Stock Exchange on Tuesday.
“Earlier, they had announced plans to issue American Depository Receipts and now the board has given its approval to the plan. But no details have been disclosed by the company so far,” said an analyst.
Stocks of many non-US companies trade on the US stock exchanges through the use of ADRs. ADRs enable US investors to buy shares in foreign companies without the inconveniences of cross-border and cross-currency transactions.
ADRs carry prices in US dollars, pay dividends in US dollars and can be traded like shares of US-based companies.
Fatima Fertiliser, which is a fertiliser manufacturing concern and part of the Fatima Group, also announced its financial results for the first half ended June 2010.
The company posted after tax losses of Rs73.57 million in January to June 2010, a deterioration of 82 per cent compared with losses of Rs40.38 million in the same period last year.
Administrative expenses had a major part in the costs as they rose to Rs60.85 million compared with Rs43.23 million last year.
“The company incurred losses because it is a new starter. It will improve its income and likely achieve break-even in the current financial year,” said Bilal Qamar, analyst at JS Global Capital Limited. Next year, the company is expected to register profits.
The government offers a 10-year subsidy on gas supply to new fertiliser plants and this will help the company improve its financial position in the coming years.
About Fatima’s competition with the already established companies, Fauji Fertiliser and Engro, Qamar said Pakistan is a urea deficit country and Fatima Fertiliser will not face any difficulty in its sales in the domestic market. “All its urea production will be absorbed.”
Published in The Express Tribune, August 25th, 2010.
Fatima Fertiliser Company has announced plans to float American Depository Receipts (ADRs) in the US financial markets in an apparent bid to secure finances.
“The board of directors has approved issuance of Level-1 American Depository Receipts subject to regulatory approvals,” the company said in a notice sent to the Karachi Stock Exchange on Tuesday.
“Earlier, they had announced plans to issue American Depository Receipts and now the board has given its approval to the plan. But no details have been disclosed by the company so far,” said an analyst.
Stocks of many non-US companies trade on the US stock exchanges through the use of ADRs. ADRs enable US investors to buy shares in foreign companies without the inconveniences of cross-border and cross-currency transactions.
ADRs carry prices in US dollars, pay dividends in US dollars and can be traded like shares of US-based companies.
Fatima Fertiliser, which is a fertiliser manufacturing concern and part of the Fatima Group, also announced its financial results for the first half ended June 2010.
The company posted after tax losses of Rs73.57 million in January to June 2010, a deterioration of 82 per cent compared with losses of Rs40.38 million in the same period last year.
Administrative expenses had a major part in the costs as they rose to Rs60.85 million compared with Rs43.23 million last year.
“The company incurred losses because it is a new starter. It will improve its income and likely achieve break-even in the current financial year,” said Bilal Qamar, analyst at JS Global Capital Limited. Next year, the company is expected to register profits.
The government offers a 10-year subsidy on gas supply to new fertiliser plants and this will help the company improve its financial position in the coming years.
About Fatima’s competition with the already established companies, Fauji Fertiliser and Engro, Qamar said Pakistan is a urea deficit country and Fatima Fertiliser will not face any difficulty in its sales in the domestic market. “All its urea production will be absorbed.”
Published in The Express Tribune, August 25th, 2010.