FFC to acquire majority stake in Foundation Wind Energy for Rs14.02 billion

KARACHI: Fauji Fertilizer Company (FFC) will acquire entire shareholding of Fauji Fertilizer Bin Qasim (FFBL) and Fauji Foundation in Foundation Wind Energy (FWEL) companies at an aggregate consideration of Rs14.027 billion, a bourse filing said on Tuesday.

The Fauji Foundation and FFBL have obtained approval of their respective boards to sell their entire shareholding in the Foundation Wind Energy-I and Foundation Wind Energy-II to FFC at an aggregate consideration of Rs14.027 billion plus sharing of the delayed payment surcharge, it added.

In October last year, FFC had submitted an expression of interest (EoI) for the acquisition of the majority shares in FWEL-I and FWEL-II collectively held by Fauji Fertilizer Bin Qasim Limited (FFBL) and Fauji Foundation.

The FFBL notified the bourse that it will sell 122.587 million shares in FWEL-I, constituting 35 per cent of FWEL-I capital to FFC for Rs2.727 billion, while 123.469 million shares in FWEL-II, constituting 35 per cent of FWEL-II capital to FFC for Rs2.747 billion.

The Foundation Wind Energy I and II, 50MW wind power generation projects each, are located at Khutti Kun New Island in the Taluka Mirpur Sakro of Thatta district in Sindh.

Fauji Foundation held a 30 per cent stake in FWEL-I, FFBL held 35 per cent and CapAsia, a Malaysian private equity firm, held the remaining 35 per cent. Similarly, Fauji Foundation held a 20 per cent stake in FWEL-II, FFBL held 35 per cent, CapAsia 25 per cent and Tapal Group 20 per cent.

The projects were established under the Policy for Development of Renewable Energy for Power Generation 2006 on Build, Own and Operate (BOO) basis with the concession period of 20 years from the commercial operations date. FWEL-I achieved commercial operations on April 11, 2015 and FWEL-II achieved it on December 10, 2014.

“[The] Foundation Wind Energy I and II are profitable projects and, FFC being the pioneer of wind energy in Pakistan, has the necessary skills and expertise to create synergies by expanding in this sector,” the company noted in its last annual report.

As another step towards diversification, FFC has embarked upon a new venture for the provision of highly specialised and technical services to other organisations.

The services would be extended through the recently formed wholly-owned subsidiary, OLIVE Technical Services (Pvt) Ltd. OLIVE will enhance FFC’s existing portfolio of services to a larger level for meaningful returns.

For the quarter ended March 31, 2021, FFC posted a net profit of Rs5.8 billion, 36.38 per cent higher than the profit of Rs4.26 billion recorded in the same period of the last year.

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