Hubco starts legal proceedings against encashment notice

KARACHI: The Hub Power Company Ltd (Hubco) has started legal proceedings against an encashment notice by China Power Hub Generation Company Limited (CPHGC), a statement said on Thursday.

In a statement to Pakistan Stock Exchange (PSX), the company said, “Following issuance of the encashment notice by CPHGC to the issuing bank in respect of Hubco’s SBLC [standby letter of credit], Hubco, to safeguard interests of its shareholders, on advice of its legal counsel hasinitiated legal proceedings against the encashment notice. We are pleased to inform that the court has issued summons to the impleaded parties in the matter.”

On Wednesday, CPHGC served a notice to Hubco for encashment of a SBLC worth $150 million. Hubco notified the PSX that the company as a joint venture partner and Pakistani sponsor of CPHGC provided security in the form of a standby letter of credit of $150 million in favour of CPHGC expiring on November 23, 2022.

Hubco shares closed at Rs66.96 (up Rs0.51; +0.34 percent) on Thursday after the aforesaid development.