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May 07 - 13, 2001

Private sector pays $38.2mn on eurobond maturity

A leading local corporate on Thursday paid $38.2 million to international investors on maturity of its eurobond launched in 1994.

"By the grace of Allah, we made the final payment of $38.2 million," Dewan Mustafa of Dewan group of companies told.

The group had launched the bond to finance setting up of the second Dewan Salman Fibre making plant in the NWFP.

The first plant set up earlier was capable of producing 180 tonnes of fibre per day. The establishment of the second one doubled this capacity.

Bankers said the Citibank made the payment on behalf of Dewan group.

Dewan Salman eurobond was the only eurobond launched by a Pakistani corporate and it traded successfully on London and Luxembourg stock exchanges.

International investors found the convertible bond quite attractive as it offered an annual return of around five per cent.

Dewan group had launched $45 million worth of bonds out of which $7.7 million were converted into equity of the project in 1994 leaving $37.3 million liability with Dewan group. The amount rose to $38.2 billion on maturity with the accumulation of interest.

Bankers said what was particularly good about Dewan Salman eurobond was that the issuers never defaulted on interest payment not even after May 28, when Pakistan put restriction on foreign exchange outflows after going nuclear.

"At times we had to arrange foreign exchange from open market to make interest payment on the bonds," boasted Mustafa adding that successful maturity of the bond had left a good impression in the international market.

Bankers said though Dewan Salman eurobond had been a big success yet there is little optimism among local corporates about launching eurobonds.

Pakistan assured of $700mn WB credit

Pakistan has won assurance of a $700 million credit from the World Bank for the current year that will be additional to drought relief pledged by the bank.

This was revealed after a meeting between Federal Finance Minister Shaukat Aziz with World Bank President James Wolfensohn on Saturday on the sidelines of the IMF/World Bank annual spring meetings in Washington.

Mr Aziz told reporters on Saturday he had found the World Bank chief receptive to the progress made by the military regime and said that his meeting had gone "very well". Mr Wolfensohn appeared understanding of Pakistan's problems, he added.

The finance minister has held meetings with several World Bank and IMF officials, as well as representatives of the Bush administration, and seems on the whole well pleased with the outcome. He said he had found the IMF chief, Horst Kohler, also to be responsive to Pakistan's needs.

Rescheduling accords signed

Pakistan and Norway have signed agreement Monday on the consolidation and rescheduling of debt in pursuance of the agreed minutes of Paris Club signed on January 23, 2001.

Under the agreement debt service payments of US dollars 6.6 million, due during the period from March 1, 2000 to September 30, 2001 on loans contracted up to September 30, 1997, will be consolidated and rescheduled for repayment in 30 semi annual instalments commencing from November 01, 2004.

The agreement was signed by Nawid Ahsan, secretary economic affairs division, on behalf of the government of Pakistan and by Ms Paivi jokikyyny, deputy head of mission, embassy of the Republic of Finland, Islamabad, on behalf of the government of Norway.

Crescent Sugar Mills

Crescent Sugar Mills & Distillery Limited announced financial results for the year ended September 30, 2000, showed pretax profit amounting to Rs 94.9m and after tax profit at Rs 80.2m. These look exceedingly good against the previous year's pretax profit at Rs 7.8m and after tax profit at Rs 1.4m.

Rupee falls

The rupee on Wednesday fell to 61.50 to a dollar in inter-bank market on increased outflows amidst dwindling supply of greenbacks against the previous close of 61.25. But in the open market it closed almost unchanged at 64 to a dollar.

Senior bankers said the rupee closed around 61.45/61.50 to a dollar in inter-bank market as some local and foreign banks made heavy buying of greenbacks for their corporate clients.

Sindh talks credit with WB

The Sindh government is negotiating a provincial structural adjustment loan with the World Bank, informed sources told on Tuesday. The sources said the World Bank loan for Sindh would be linked with administrative, education, civil service and tax reforms.

Without disclosing the amount of the proposed loan, the sources said the disbursement of the money would be spread over a period of a few years. "We are working out the details," World Bank sources said. They added that the loan would not have any "strings" attached to it nor the World Bank would identify any project.

Remittances up

Overseas Pakistanis sent $804 million back home in the first nine months of this fiscal year up from $678 million in a year-ago period.

The State Bank statistics show an increase in home remittances from several countries including the United States between July 2000-March 2001 as compared to the remittances in the same period of last fiscal year.

Bankers say what has helped them attract more foreign exchange through home remittances in the first nine months of this fiscal year is a better delivery system. They claim that banks handling home remittances have reduced the time taken in the delivery of remittances to 24 hours in cities and 48 hours in rural areas but constant public complaints about long delays refute this claim.

PTCL

The Pakistan Telecommunications Company (PTCL) showed a growth of Rs2.844 billion in its total revenues at Rs45.25 billion. Total earning (profit after tax) for the nine months ended 31 March 2001, increased to Rs12.298 billion.