Engro Corporation Limited (ENGRO) and Dawood Hercules Corporation Limited (DAWH) are in the final stages of their restructuring process, following the Scheme of Arrangement. This restructuring will reshape both companies and is expected to create more value for shareholders.
Key Details of the Restructuring
Both companies have completed all necessary regulatory requirements, and received the required approvals from authorities and courts. The restructuring involves a split of DAWH into two separate entities.
Engro Holding Limited
The first new entity, Engro Holding Limited, will hold DAWH’s 40% stake in ENGRO. Engro Corporation will become an unlisted subsidiary of Engro Holding Limited.
Shareholder Swap and Issuance
As part of this restructuring, ENGRO shareholders will receive shares in Engro Holding Limited. Specifically, for every share of ENGRO, shareholders will receive 2.24 shares of Engro Holding Limited.
As a result, the number of shares for Engro Holdings will increase from 481 million to 1,204 million shares.
DH Partners Limited (DHPL)
The second entity, DH Partners Limited (DHPL), will consist of DAWH remaining assets and liabilities. DAWH’s stake in ENGRO will not be included in DHPL. Shareholders of DAWH will receive shares in DHPL on a 1:1 basis.
Additionally, DAWH shareholders will convert their shares into Engro Holding Limited and also receive shares in DHPL.
Trading and Price Adjustments
The trading of ENGRO shares will conclude today. After the book closure period (from January 8 to 14, 2025), the shares of both entities will be available for trading.
The opening price of Engro Holding Limited will be based on the closing price of ENGRO today, divided by the swap ratio. For instance, if ENGRO shares close at Rs. 486 per share, the opening price for Engro Holdings Limited will be Rs. 216.6 per share.
Summary of Restructuring Details
| Entity | Details | Impact on Shareholders |
|---|---|---|
| Engro Holding Limited | Holds DAWH’s 40% stake in ENGRO | ENGRO shareholders receive 2.24 shares of Engro Holdings per share of ENGRO |
| DH Partners Limited (DHPL) | Consists of DAWH’s assets and liabilities (excluding ENGRO investment) | DAWH shareholders receive 1:1 shares in DHPL and Engro Holdings shares |
| ENGRO | Becomes an unlisted subsidiary of Engro Holdings | ENGRO shareholders will swap their shares for Engro Holdings shares |
Summary
This restructuring of Engro Corporation and Dawood Hercules is a significant move that will bring major changes to the companies and their shareholders. With the creation of Engro Holdings Limited and DH Partners Limited, both companies are positioned for future growth. Shareholders will see their investments being restructured into new shares, opening new avenues for value creation and profitability.
