Loan for Sui gas companies: Ministry of Finance urged to extend sovereign guarantee to 24.19 billion rupees

ISLAMABAD: The oil division asked the Ministry of Finance (MoF) to extend the sovereign guarantee in the amount of Rs. 24.188 billion in favor of M / s Habib Metropolitan Bank Ltd (HMPB) and a syndicate of two banks led by United Bank Limited (UBL) and Faysal Bank in favor of Sui gas companies, official sources told Business Recorder.

Sharing the details, sources said, the Committee of Economic Coordination[ECC)duCabinettoutenexaminantunrésumésoumisparlaDivisiondupétroleen2015aapprouvédesempruntsbancairesàhauteurdeRs101milliardsenfaveurdeM/sSNGPLetM/sSSGCLpourréaliserlaphaseIIduprojetdegazoductandisquelaDivisiondesfinancesaétéinvitéeàfournirunegarantiedugouvernementduPakistan(GoP)enfaveurdecessociétésdedistributiondegazleurpermettantd’organiserlefinancementrequisauprèsdesbanquescommerciales[ECC)oftheCabinetwhileconsideringasummarysubmittedbyPetroleumDivisionin2015approvedbankborrowingtotheextentofRs101billioninfavourofM/sSNGPLandM/sSSGCLtocarryoutphase-IIofpipelineprojectwhereasFinanceDivisionwasadvisedtoprovidethegovernmentofPakistan(GoP)guaranteeinfavourofthesegasutilitycompaniesenablingthemtoarrangetherequiredfinancingfromcommercialbanks[ECC)duCabinettoutenexaminantunrésumésoumisparlaDivisiondupétroleen2015aapprouvédesempruntsbancairesàhauteurdeRs101milliardsenfaveurdeM/sSNGPLetM/sSSGCLpourréaliserlaphaseIIduprojetdegazoductandisquelaDivisiondesfinancesaétéinvitéeàfournirunegarantiedugouvernementduPakistan(GoP)enfaveurdecessociétésdedistributiondegazleurpermettantd’organiserlefinancementrequisauprèsdesbanquescommerciales[ECC)oftheCabinetwhileconsideringasummarysubmittedbyPetroleumDivisionin2015approvedbankborrowingtotheextentofRs101billioninfavourofM/sSNGPLandM/sSSGCLtocarryoutphase-IIofpipelineprojectwhereasFinanceDivisionwasadvisedtoprovidethegovernmentofPakistan(GoP)guaranteeinfavourofthesegasutilitycompaniesenablingthemtoarrangetherequiredfinancingfromcommercialbanks

The Finance Division, in accordance with the decision of the ECC, issued on September 19, 2016 a sovereign guarantee to M / s SNGPL in favor of a syndicate of banks (Lead Bank HBL) to guarantee a loan with a value of Rs. 54.670 billion. The guarantee is valid for the term of the loan from fiscal year 2016 to fiscal year 2026. The outstanding loan is currently 24.188 billion rupees.

M / s SNGPL as part of a guaranteed loan of Rs. 54,670 million at six (6) months KIBOR plus 1.10% with a consortium of banks.

GHPL loan repayment: PD authorized to use GIDC funds

Considering the high price of the current loan, M / s SNGPL decided to swap the debt with a lower mark-up rate while all banks waived the prepayment penalty and tenders were issued for the new loan.

Apparently, M / s Habib Metropolitan Bank Ltd[HMPB)etunsyndicatdedeuxbanquesdirigéparUnitedBankLimited(UBL)avecFaysalBankontoffertdesfacilitésdeprêtàtermepourRs1250milliardetRs22938milliardsrespectivementàmoins55pbau-dessusduKIBORàtroismoisetàmoins25pbau-dessusduKIBORàsixmoisétantrespectivementlesplusbassoumissionnairesretenus[HMPB)andasyndicateoftwobanksledbyUnitedBankLimited(UBL)alongwithFaysalBankofferedtermloanfacilitiesforRs1250billionandRs22938billionrespectivelyatminus55bpsabovethreemonthsKIBORandminus25bpsabovesixmonthsKIBORrespectivelybeingthesuccessfullowestbidders[HMPB)etunsyndicatdedeuxbanquesdirigéparUnitedBankLimited(UBL)avecFaysalBankont​​offertdesfacilitésdeprêtàtermepourRs1250milliardetRs22938milliardsrespectivementàmoins55pbau-dessusduKIBORàtroismoisetàmoins25pbau-dessusduKIBORàsixmoisétantrespectivementlesplusbassoumissionnairesretenus[HMPB)andasyndicateoftwobanksledbyUnitedBankLimited(UBL)alongwithFaysalBankofferedtermloanfacilitiesforRs1250billionandRs22938billionrespectivelyatminus55bpsabovethreemonthsKIBORandminus25bpsabovesixmonthsKIBORrespectivelybeingthesuccessfullowestbidders

According to the petroleum division, the termsheets provided by HMPB and UBL were approved by the finance division in its letter of December 10, 2021. Under the terms of the new loans, the comfort letter (LoC) in favor of new lending banks for an amount of Rs. 24.188 billion are to be issued by the Finance Division for the disbursement of funds. In addition, the issuance of a sovereign guarantee will be required for the perfect pledge of the loan guarantee.

For the issuance of the comfort letter and the guarantee, the petroleum division submitted the SNGPL case to the finance division on December 21, 2021 and informed this summary of the financing facility in the amount of Rs. 24,188 Billion is to be moved for consideration by the Cabinet ECC on an immediate basis and that the Finance Division will issue a LoC and GoP guarantee once the relevant forum approval is in place. In order to benefit from the financing facility, SNGPL must achieve the financial closure of the new term loans by December 30, 2021.

The petroleum division is of the opinion that this is not a new case for the granting of the GoP guarantee, because after the issuance of the letter of credit, the existing bank guarantee must be reissued in favor new lending banks against the current outstanding amount of the previous loan of 24.188 billion rupees for the remaining term of the loan.

The petroleum division has proposed that the ECC consider approving a sovereign guarantee in the amount of Rs. 24.188 billion in favor of M / s Habib Metropolitan Bank Ltd HMPB) and a syndicate of two banks led by United Bank Limited (UBL) for the remaining term of the loan, i.e. 4 & 1/2% years with issue of a comfort letter by the Finance Division.

Copyright Business Recorder, 2021

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