NML to mull divestment of shareholding in Pakgen

KARACHI - Nishat Mills Limited (NML) will hold a Board of Directors meeting on December 20, 2010, to mull over divesting 10 per cent of its stakes in Pakgen Power, formerly AES Pak Gen (Private) Company through an Offer for Sale and Listing of Pakgen, it was stated in a notice issued by NML to KSE here on Monday. NML, as of June 30, 2010, holds 119.1m shares (or 32pc stake) of Pakgen at Rs13.9 per share. An analyst at JS Global Research sees that the divestment is expected to be materialised by early next year most probably during the months of January, February 2011. We believe the listing price would be some where between Rs20- Rs30 per share which could be higher by Rs6 - Rs16 than companys purchase price of Rs14 per share, said another analyst at Topeline Research. If this happens, this would have a one time effect on companys bottom-line by around Rs65-Rs173m (Rs0.18-Rs0.49 per share after tax) in FY11. However with this divestment, companys recurring dividend income according to our estimates will reduce by Rs48m (per share impact of Rs0.14).

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