Chakwal Spinning secures Rs7.8bn to set up data centre

KARACHI: Chakwal Spinning Mills Limited (CLOUD) has finalized a significant investment agreement with PNO Capital Limited, securing Rs7.784 billion for establishing data centre and cloud operations in Pakistan. The announcement was made in a notice to the Pakistan Stock Exchange (PSX) on Monday.

According to the notice, the term sheet was signed following decisions by the company’s board of directors on July 12, 2024, and subsequent shareholder approval at the extraordinary general meeting (EOGM) on August 2, 2024. This investment marks a major step for CLOUD, which is currently classified as a defaulter.

PNO Capital Limited, a private equity fund with a focus on technology and healthcare sectors, will provide the investment. Of the total amount, Rs500 million will be allocated as equity, including Rs400 million from the sponsors. The remaining Rs7.3 billion will be provided through convertible bonds, which will have a three-year maturity period and an annual coupon rate of 10 per cent, to be adjusted accumulatively at the end of the term.

CLOUD has appointed Optimus Capital Management (Private) Limited as its financial advisor to oversee the investment process.The IT sector in Pakistan has shown promising growth amidst an otherwise sluggish economy, with the country’s information technology and IT-enabled services (ITeS) export remittances reaching a record $3.2 billion in the fiscal year 2023-24. This represents a 24 per cent increase compared to the previous fiscal year’s $2.6 billion.