Amreli Steels clears Rs22.6bn finance restructuring plan

Amreli Steels Limited (ASTL), one of Pakistan’s leading steel manufacturers, has received the green light to restructure and revise the repayment terms of loans worth Rs22.6 billion. The financing was originally obtained from a consortium of banks and financial institutions.

The company disclosed the development in a notice to the Pakistan Stock Exchange (PSX) on Wednesday. According to the statement, the Board of Directors has approved the restructuring framework, which includes a term sheet, a Master Restructuring Agreement (MRA), a Master Collection Agreement, and supporting documentation finalized with the financiers.

As part of the financial restructuring, the company outlined the following key measures:

• All restructured facilities, including principal and markup/profit, will carry a three-year moratorium. However, for existing long-term facilities, only principal repayments are deferred for two years. The overall restructuring tenor spans 10 years, effective July 1, 2024.
• Short-term borrowings of nearly Rs7.5 billion (conventional) and Rs3.5 billion (Islamic) will be converted into long-term facilities and merged into the restructured loan package.
• The markup rate will remain fixed at KIBOR, with no additional spread, throughout the tenor and amount of the restructuring agreement.
• The company’s sponsors have committed Rs4 billion in fresh liquidity through equity injections, while additional funds will be raised from the sale of non-core assets to support working capital.

Amreli Steels, incorporated as a private limited firm in 1984 and later converted into a public company in 2009, is primarily engaged in the production and sale of steel bars and billets.

This restructuring marks a significant step for the steelmaker as it aims to strengthen its financial footing, secure liquidity, and ensure stability in the face of Pakistan’s challenging economic environment.