CHERAT CEMENT COMPANY LIMITED FULLY GEARED UP TO INSTALL THE NEW PRODUCTION PLANT

Lahore: The senior management of Cherat Cement Mr. Yasir Masood – Executive Director Finance, Mr. Abid A. Vazir – Executive Director and Mr. Ahmad Shoaib Khan – Resident Director visited the Lahore Stock Exchange to participate in the Corporate Briefing Program (CBP). CBP is an interactive program initiated by the Lahore Stock Exchange under the Corporate Communications Department to encourage companies to come forward and share their financial and non financial projects before the members, TREC Holders, investors and the media to abridge the communication gap between the listed companies and the market participants.

In his presentation, Mr. Abid A. Vazir gave a background of the Ghulam Faruque Group and the business activities it is involved in. He explained that in view of increase in domestic demand for cement, Cherat Cement has decided to install a new production plant with a production capacity of over 1,300,000 tons per annum. The new line will take the total production capacity of the company to over 2,400,000 tons per annum. Mr. Vazir informed that the new plant is being installed at the existing factory site and will help cater the demand for cement which will further increase the company’s market share and profitability.

While highlighting the financial performance, Mr. Yasir Masood informed that the cement industry witnessed a growth of 2.5% in the year 2014. Explaining financial performance of Cherat Cement, he informed that the profitability of the company has been on an upward trajectory since the Year 2011. While delivering the presentation before the investors, Mr. Masood shared the key financial indicators of the company including EPS, Dividend Payout and Market price per share recorded over a period of past six years.  He also informed that the new plant is expected to be commissioned in 30 months time at a total cost of approximately Rs. 12 billion. In order to finance this project, Cherat Cement has announced issuance of 68% right shares on the existing paid-up capital of the Company, which will be offered at an issue price of Rs 25/- per share including a premium of Rs. 15/- per share. The Company is raising approximately Rs. 1.8 billion for the project by way of rights issue. It has already arranged loans amounting to Rs. 9.5 billion from the banks. The company will meet the remaining requirement from its own resources.

Mr. Aftab A. Ch, the MD of LSE stated that the start of the CBP is yet another fulfilment of the corporate social responsibility agenda of the Exchange. He said that CBP has been started to create more awareness about the companies in the general investors and to also enable the companies to fulfil their investor relations obligations. He urged all listed corporations to make use of the CBP opportunity to create a strong bond with their investors. He said that such regular communication with the investors would help the companies in their capital structure planning as the companies would be able to assess the mood of the investors and plan further capital raising through secondary public offering or the right shares. He stressed that LSE considers it essential for the companies to participate in such programs so that there is no information asymmetry regarding our listed companies.

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