Billions of rupees bank loans settlement

Dewan Group has proposed to sell its cement and sugar companies to settle billions of rupees worth bank loans in an apparent last ditch effort to remain afloat, people close to the development said.

Top Pakistani bankers will meet on Friday to discuss whether the four companies should be liquidated or sold to some other business group, which could turn them around to pay off their liabilities, they said.

“The group has over Rs50 billion in debt,” a banker said. “In some cases, banks have not received a single installment or interest payment during the last four years. It is about time that they sell their assets to settle our debt.”

Likely outcome of deliberations will be the sale of two cement and two sugar units to recover part of the loans, while the remaining would be paid off by the new owner later, a banker said.

The Dewan Group, which owns 14 companies, has borrowed from almost all the Pakistani banks. Most of its factories are closed as banks have stopped financing working capital.

As of March 2010, Dewan Sugar Mills has accumulated losses of Rs661 million, which eroded its paid-up capital by Rs106 million. Its current liabilities exceed assets by Rs2.09 billion.

The other sugar mill is Dewan Khoski Sugar. Its financial statements were not available on the website of the group. The financial statements of Dewan Hattar Cement were also unavailable.

Dewan Cement is in a relatively stable position with fixed assets valued at over Rs19 billion. The losses incurred by the company are mainly due to the economic slowdown.

At its prime, Dewan had a turnover of over Rs30 billion and around 12,000 employees. Now its workforce has shrunk to 4,000.

A banker said that chances for the loan rescheduling seem remote. “The situation could have been different if Dewan Group had made the offer two years back.”

Dozens of recovery suits are pending before courts. The group has also filed counter suits against banks.

It still has some companies, which carry a lot of intrinsic value. The Dewan Salman Fibre is the country’s largest manufacturer of polyester stable fibre.

“This valuable company is literally dormant,” said Hamad Aslam, head of research at BMA Capital.

“The other two local PSF makers are running at full capacity and yet the country has to import to meet local demand. So you can imagine the potential.”

Some people close to the Dewan family say banks have been ruthless in their demands. “If a little more time had been allowed, the companies could have made a comeback. Other companies in cement, sugar and automotive industries are doing pretty good these days.”

The decline of the once powerful group in the wake of infighting between Dewan brothers is classic example of the vulnerability of family-run businesses.

A source said for too long, the group avoided hiring professionals in the management and relied on family members for its operations, something that ultimately proved disastrous.

Govt awards five exploration licences to Dewan Petroleum

ISLAMABAD: The Ministry of Petroleum and Natural Resources has awarded five oil and gas exploration licences to privately-held Dewan Petroleum Ltd, an official statement said on Friday.

The company secured licenses for the blocks 2869-14 (Kalchas South), 2872-1 (Noor South), 2871-3 (Rukanpur), 2771-2 (Khangarh) and 2871-2 (Yazman) for a financial commitment of $18.65 million, the statement added. The blocks are spread over 12343.35 square kilometers area, it added.

The agreements were signed with Dewan Petroleum by Secretary Petroleum and Natural Resources Kamran Lashari, Director General Petroleum Concessions, Mohammad Naeem Malik and Chairman Dewan Petroleum Limited Zia Ur Rehman Farooqui.

Minister for Petroleum and Natural Resources Syed Naveed Qamar was also present.

The government gives high priority to promote a culture of self-dependency and efforts remain underway to exploit the local resources to meet energy needs, the minister told reporter.

He said local companies would have to take the lead in carrying out exploration work in view of the security situation in certain areas. He said the government was also signing agreements with other countries to meet energy needs and the IP project finalised recently with Iran was part of such efforts. He said the majority of oil and gas production was from Sindh but major discoveries had also been made in Khyber Pakhtunkhwa.

MANDI BAHAUDDIN CITY NEWS

MANDI BAHAUDDIN: Punjab Minister for Prisons and Industries Chaudhry Abdul Ghafoor has criticised the government for seeking financial help from the international institutions.

He was addressing a gathering at Dera Awanan here on Tuesday evening. The minister asked President Asif Ali Zardari not to sell national dignity in exchange for few dollars. “The federal government is creating crisis to deceive the masses and mint money on one or another pretext,” he said. He added that foreign powers wanted to destabilise Pakistan by showing the presence of terrorists in Southern Punjab.

He was of the view that Israel, India and their allies wanted to seize country’s nuclear programme while the rulers were promoting ties with these countries. “Time has come to teach a lesson to Israel as it violated international rules by attacking Palestine-bound aid flotilla,” he maintained. PML-N district president Dewan Mushtaq Ahmad, secretary Sikandar Hayat Gondal, city president Haji Usman Ahmad, former MNA Mumtaz Ahmad Tarar, former tehsil nazim Imtiaz Ahmad Chaudhry, Tahir Awan and Asifullah Awan were also present. Meanwhile, hundreds of people belonging to the Awan family joined the PML-N.

CONDOLENCE: President Asif Ali Zardari and Prime Minister Syed Yousaf Raza Gilani have expressed their grief over the sad demise of Haman Shamim, son of PPP district president Dewan Shamim Akhtar, on Wednesday. Meanwhile, PPP Punjab president Samiullah Khan visited the Dewan House and offered his condolence over the death son of Dewan Shamim Akhtar.