Crescent Steel to set up power plant
The Crescent Steel and Allied Products (CSAP) proposes to invest up to Rs430 million in a power generating unit of 14MW.
The directors conveyed the decision to the stock exchanges on Friday, in compliance with the clause relating to ‘material information’ under the Code of Corporate Governance.
The power plant would be a wholly owned subsidiary of the CSAP which initially was only in the business of steel pipe manufacturing and coating.
It thought of diversifying into textiles and acquired a running cotton spinning mill of 14,400 spindles in 2000.
During the last reported quarter ended Sept 30, 2009, the company posted profit after tax at Rs175 million, which depicted a turnaround from loss of Rs120 million suffered in the same quarter last year.
The company has mountain of cash, almost all invested in equities. The financial statements showed that total investments in long term and short term classification at the end of Sept stood at the tall order of Rs1,143 million and Rs700 million. Bulk of it was invested in 60 million shares (for 17.65 per cent stake) in associate, Altern Energy Limited, valued at Rs934 million. Witnessing the vagaries of the stock markets, the directors appear now to have thought of diverting a part of the funds from paper assets to tangible asset — the power plant.
In his last quarter review, chief executive Ahsan M Saleem says: “The implementation of Iran-Pakistan Gas pipeline Project is becoming more and more important due to current energy crisis.”
And he adds: “The required pipes for this project are well within our production range and we will be in absolute readiness to bid for supplier to this project”.
Baig Spinning Mills
Before going off the main board of KSE, the Baig Spinning Mills is paying Rs2.104 to the shareholders for the stock of the par value of Rs10. The company went into voluntary liquidation following which it was put on the suspension list of the KSE on Nov 1 and company stock ceased to trade.
The company share hit the highest price at Rs1.04 and touched the low of 56 paisa with 11000 shares traded during the Jan-Oct 2009.
The company has 9.1 million issued-subscribed and paid-up shares. It would be safe to assume that majority equity would be in the hands of sponsors. It is nonetheless heartening to hear the directors assert that the company was able to “realise all assets and settle liabilities.”
In case of liquidation, as owners of the company, small shareholders who stand last in the row with hat in hands, to receive whatever is salvaged after all other interests such as those of creditors; banks; employees and other legal dues have been settled are often seen to go home without even a pittance. If in this case they are to receive Rs2.104 per share, the ordinary shareholders should be a satisfied lot.