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Sun. Jul 14th, 2024

TGL and LCI to buy back equity stake in Lucky TG (Pvt) Ltd – Business & Finance

By Vaseline May30,2024

Citing economic conditions, Tariq Glass Industries Limited (TGL) and Lucky Core Industries Limited (LCI) have decided to buy back their equity stake in Lucky TG (Private) Limited (LTG).

LCI announced the development in its notice to the Pakistan Stock Exchange (PSX) on Thursday.

The company shared an update on the status of Lucky TG (Private) Limited (LTG) and informed that LTG was established as a joint venture between TGL and LCI, with a stake of 49% and 51% respectively, with the primary objective of development of an advanced greenfield float glass production facility with a production capacity of up to 1000 tons per day.

TGL, LCI’s float glass project, faces delays, but partners ‘committed to its completion’

“The plant was envisaged to be set up in two phases, with a production capacity of 500 tonnes per day each, with the expectation that the plant would become commercially operational in the financial year 2024-25,” LCI said in its notice.

“However, uncertain economic conditions have caused delays and necessitated a reassessment of project timelines. During a period when the project is delayed, the funds in Lucky TG remain unused,” the report said.

Therefore, the Board of Directors of Lucky TG has granted Lucky TG “approval to redeem/purchase its shares in accordance with section 88 of the Companies Act 2017 read with the relevant provisions of the Companies Regulations 2024, inter alia, subject of obtaining the required Approvals”.

According to the release, the buyback will be commensurate with the company’s current shareholding (LCI) (i.e. 51%) in Lucky TG and LCI will continue to hold 51% of the shares in Lucky TG following the buyback.

“Lucky TG will remain solvent and able to meet its financial obligations following the share buyback,” it added.

This development comes at a time when industries in the South Asian country continue to be engulfed by a host of economic challenges, including rising interest rates, high energy tariffs, supply chain issues and declining demand.

However, the joint venture partners, TGL and LCI, remain committed to completing the project once the economic environment improves.

A similar statement was released by TGL in its filing with the stock exchange on Thursday.

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