Hub Power Company Expands Stake in SECMC

Hub Power Company Expands Stake in SECMC

Karachi, February 17, 2024 – The Hub Power Company Limited (Hubco) has taken a strategic step towards enhancing its presence in the energy sector by entering into a definitive agreement to acquire an additional 9.5 percent stake in the Sindh Engro Coal Mining Company Limited (SECMC).

The stake, currently held by Habib Bank Limited (HBL), will elevate Hubco’s total holding in SECMC to 17.5 percent, solidifying its position as the second-largest shareholder in the coal mining company.

Analysts at Arif Habib Limited predict that this acquisition will have a substantial positive impact on Hub Power Company’s profitability, contributing an annualized impact of Rs 750 million (EPS: Re 0.58). The move aligns with Hubco’s strategic vision for expansion and diversification within the energy sector.

The financial implications of this strategic move indicate that Hub Power Company is expected to invest approximately Rs 7,125 million (equivalent to Rs 5.49 cash per share) for the acquisition of the additional stake. This investment underscores Hubco’s confidence in the long-term potential and profitability of SECMC and the broader coal mining industry.

It is worth noting that this transaction is subject to necessary corporate and regulatory approvals and conditions. The completion of the deal will depend on the green light from relevant authorities, ensuring compliance with regulations and adherence to corporate governance standards.

The synergy between Hubco and SECMC has the potential to unlock new opportunities and synergies, benefiting both companies in terms of operational efficiency and overall growth. As a significant player in the energy sector, Hub Power Company’s increased stake in SECMC aligns with the broader industry trend of companies seeking to strengthen their positions in strategic ventures.

SECMC, a key player in the coal mining sector, has been actively contributing to Pakistan’s energy landscape by harnessing the country’s coal reserves. The collaboration between Hubco and SECMC signifies a commitment to sustainable energy practices and contributes to the national goal of reducing reliance on imported fuels.

Industry experts are closely watching the developments, anticipating positive outcomes for both companies involved. The increased stake in SECMC positions Hubco strategically to capitalize on the growth potential of the coal mining industry, which is crucial for meeting Pakistan’s growing energy demands.

Hub Power Company’s move to acquire an additional 9.5 percent stake in SECMC reflects its commitment to strengthening its foothold in the energy sector. As the transaction progresses through regulatory approvals, the market will be closely monitoring the potential impact on both companies and the broader energy landscape in Pakistan.