Engro Corp and Dawood Hercules All Set to Finalize Restructuring Process

Engro Corporation Limited (ENGRO) and Dawood Hercules Corporation Limited (DAWH) are set to finalize the restructuring process in line with the Scheme of Arrangement.

Both companies have completed the regulatory requirements and received approvals from the relevant authorities and courts, Arif Habib Limited said in a report.

To recall, the respective boards of both companies have approved the Scheme of Arrangement, under which DAWH will be split into two separate legal entities.

The first entity, including DAWH’s 40 percent stake in ENGRO, will be rebranded as Engro Holding Limited. ENGRO will become an unlisted subsidiary of Engro Holdings Limited as part of this restructuring.

According to the swap ratio, ENGRO shareholders will receive 2.24 shares of Engro Holdings for every share of ENGRO. As a result, the shares of Engro Holdings Limited will increase by 723 million to 1,204 million shares.

The second entity will consist of DAWH’s assets and liabilities, excluding its investment in ENGRO, and will be listed as DH Partners Ltd (DHPL).

All assets and liabilities of DAWH (excluding its stake in ENGRO) will be transferred to this new entity, which will issue shares to DAWH’s existing shareholders on a 1:1 basis. It is important to note that DAWH shareholders’ shares will be converted to Engro Holdings Limited and additionally getting DHPL shares.

As per the timeline provided, trading of ENGRO will conclude today.

Price of both the entities post-restructuring

These scrips will be available for trading after the book closure (8-14 January 2025).

After the book closure period, Engro Holdings Limited will open at a price calculated based on the closing price of ENGRO today, divided by the swap ratio.

For example, if ENGRO closes at Rs. 486.0/share, the opening price of Engro Holdings Limited will be Rs. 216.6/share.

Meanwhile, for DHPL, the closing price of DAWH will be subtracted from the price of Engro Holdings Ltd. If DAWH closes at Rs. 270.0/share today, DHPL’s price will be Rs. 53.4/share.