By Staff Reporter
ISLAMABAD: Petroleum Division has raised questions over Hub Power Holding Limited’s (HUBCO) undertaking about the transfer of entire share capital of Eni Pakistan Limited to Prime International Oil & Gas Company Limited (PIOGCL), while moving the corporate regulator to vet the case for clarity, it was learnt on Monday.
The Securities And Exchange Commission Of Pakistan (SECP) has been asked to provide its expert opinion on the legitimacy of Eni Pakistan’s disposing of its entire share capital to PIOGCL and the corporate governance and capability of PIOGCL in performance of its obligations.
PIOGCL is a consortium of HUBCO and Eni Employee Buy-Out Group (EBO Group).
Eni had submitted an undertaking of Hubco with the Petroleum Division, which the latter believes lacks the required unconditional financial support of PIOGCL for obtaining the assets of ENI Pakistan.
The Petroleum Division in a letter to the SECP urged the corporate regulator to suggest a foolproof mechanism of requisite funding from HUBCO for the transfer of control from Eni Pakistan to PIOGCL.
The letter written by the Petroleum Division’s Directorate General of Petroleum Concession to the Chairman SECP reads that Eni Pakistan Limited is disposing its entire share capital to PIOGCL.
“SECP may also like to advise us as to what could be a foolproof mechanism to make HUBCO obligated to provide requisite funding if required due to any financial inability of EBO Group.”
Earlier, the Petroleum Division’s Directorate General of Petroleum Concession, in a letter sent on April 1, 2022 to the managing director of Eni Pakistan, asked him to provide an undertaking of HUBCO in favour of PIOGCL that in case PIOGCL fell short of meeting its obligation/ financing with regard to the acquisition price and operating the Eni exploration blocks in future, Hubco would provide such financial support.
Eni Pakistan also submitted an undertaking to the government. In response, Hubco stated that they could provide support to PIOGCL including the EBO group’s share with regard to the acquisition price, however, they could not provide an undertaking regarding future operations as it was against the Companies Act 2017. However, “they will buy the shares in PIOGCL if it falls short of finances”.
“It is, therefore, requested to clarify whether the Companies Act 2017, restricts companies to provide an undertaking to another company regarding financial support for future operations or otherwise, the Petroleum division said adding that SECP may also like to advise us as to what could be a foolproof mechanism to make HUBCO obligated to provide requisite funding if required due to any financial inability of EBO Group,” the letter reads.
The transfer of Eni Pakistan shares to PIOGCL delayed due to questions raised over the financial health of the new entity.
The Eni-PIOGCL deal matured at $16.4 million. It is essential to determine the actual worth of ENI Pakistan’s assets in the country by a foreign firm as it can benefit the country’s national exchequer in billions of rupees, while actual determination will be helpful in running the operations of Eni’s oil and gas reserves in a safe manner.
Eni Pakistan Limited had entered sale-purchase agreements on March 8, 2021 with PIOGCL in respect of the sale of the entire share capital.
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