KARACHI: Vitol Group Ltd. is poised to increase its stake in Pakistan fuel retailer Hascol Petroleum Ltd., according to people with knowledge of the matter, Bloomberg reported on Thursday.
The world’s biggest independent oil trader intends to remain a minority shareholder after the increase, which it will do so through Hascol’s planned rights issue, said the people, who asked not to be identified as the information isn’t public.
Vitol, which now holds 27.5 percent in Hascol, Pakistan’s fourth-largest seller of petroleum products, has gradually increased its stake since first acquiring 15 percent in April 2016.
A Vitol spokeswoman in London declined to comment. An official from Hascol didn’t immediately respond to a request for a comment.
Hascol announced it would issue rights at 10 rupees in a bid to raise 8 billion rupees, the company said in an exchange filing on Wednesday. Shares rose as much as 4.4% on Wednesday after the announcement.
The company in a statement to Pakistan Stock Exchange (PSX) said its board has approved planned rights issue. “The board of directors of Hascol petroleum limited has approved the increase in the ordinary paid up share capital of the company by issuing of a further 800,000,000 ordinary shares,” it said in a communiqué to the bourse on Wednesday.
The shares will be “offered to the shareholders of the company in proportion to the number of the shares held by each shareholder… at a price of Rs10/share in the ration of approximately 4 right shares for every one existing ordinary share of Rs10 each.”
Hascol said the proceeds of the right share will be utilised for meeting capital requirement of the company and the planned issue is “expected to enable the company to improve its performance in term of profitability thereby resulting in better returns to the shareholders”.
“The right issue is being made at a price which is less than the current market price and hence there is no major investment risk associated with the right issue.” Hascol posted a net loss of Rs2.709 billion in the quarter ended September 30.
The company also saw its revenues dropped to Rs25.55 billion in the quarter from 62.197 billion in the same period last year. The company publicly listed on the PSX in May 2014 and was valued at company Rs5.4 billion.
The retailer last month announced it’s looking to raise 6 billion rupees ($39 million) through the rights issue.