Karachi: We are in receipt of your letter reference No.KSE/Gen-7104 dated November 21, 2011 received us on November 24, 2011 and subsequently your Notice reference No.KSE/N-6330 dated November 28, 2001 received us on November 29, 2011 on the subject cited above. In this respect we would like to bring in your kind notice that Dost Steels Limited (DSL) is already been taking up issues of not been in production with the Securities and Exchange Commission of Pakistan (SECP) in pursuance of provisions of Section 305 (c) of the Companies Ordinance, 1984.
In this regard we have been served with letter reference No.EMD/233/693/2007-686 dated November 23, 2011 advising submission of Revival Plan of the DSL. In response to this we have submitted our Revival Plan duly copied to your earned office (KSE).
Please find enclosed herewith copy of letter reference No.EMD/233/693/2007-686 dated November 23, 2011 from SECP for your ready reference. In our reply to the SECP we have already enlightened constraints being faced by the Promoters of DSL and their efforts to bring the company into production.
As requested to the SECP about extension in applicability of provisions of Section 305 (c) of the Companies Ordinance, 1984. We also request you please allow us extension in applicability of Listing Regulation No.30 (1) (a) and defer placement of DSL in “Defaulters’ Segment of KSE” for 1 year.
Examination of Accounts for the Period Ended 30.06.2011
This is with reference to your letter dated November 02, 2011 in response to this office letter dated October 28, 2011 on the captioned subject.
Your attention is invited towards provisions of Section 305 (c) of the Companies Ordinance, 1984 (Ordinance) which provide that a company may be wound up by court “if the company fails to commence business within one year of its incorporation or suspends its business for a whole year”.
In this context, you are hereby advised to submit complete revival plant of the Company within one month of the date of this letter. Please note that in case of non submission of revival plan, this office will be constrained to initiate winding up proceedings in accordance with the above referred provisions of the Ordinance.
Examination of Accounts for the Period Ended June 30. 2011.
Please refer to your letter reference No.EMD/233/693/2007-686 dated November 23, 2011 received us on November 25, 2011.
We have already explained our present project status in detail vide our letter dated November 02, 2011 addressed to SECP. The Plant erection and cold commissioning have been completed in July 2008 which was also checked and approved by the project supplier Siemens VAI’s erection supervisors. DSL is in a position to proceed with the subsequent stages of hot mill commissioning and commercial production. However funds to the tune of PKR 800 Million to come into production were not made available by the syndicate banks.
We have now awarded the financial restructuring mandate to the Asset Rehabilitation Group of the National Bank of Pakistan, Head Office, Karachi for our financial restructuring. This exercise is proceeding and is expected to reach finality in the 2nd quarter of 2011-2012.
The National Bank of Pakistan has also assigned the Technical, Financial, Commercial due diligence to Ernst and Young Ford Rhodes Sidat Hyder, Transaction Advisory Services. We are pursuing the finalization of Technical, Financial and Commercial due diligence reports with the National Bank of Pakistan through its Corporate and Investment Banking department headed by Mr. Sardar Azmat Babar (Senior Vice President ARG). The Technical, Financial and Commercial due diligence for financial restructuring of Dost Steels Limited comprises over following stages;
01. Progress Report by financial, technical and commercial consultants.
02. Civil Works Report.
03. Electrical Works Report.
04. Mechanical Works Report.
05. Combined Report.
06. Market Report
07. Draft Report
08. Final Report
09. NBP’s restructuring Proposal to Syndicate members.
10. Restructuring proposal approval by the Syndicate members.
11. Restructuring proposal acceptance by DSL.
Presently the stage 7 “Draft Report” is in culmination phase and it is expected that the final stage will be achieved in the second quarter of 2011-2012. The successful financial restructuring should result in the restructuring of our existing term loans and further term loans along with equity contribution by strategic investor.
Project Promoters of DSL have not given up and totally committed to get the project in production. Due to reasons beyond our control, we could not achieve our project completion within targeted time. The project sponsors have been attending to all the financial, technical and legal issues. It is evident that after lost disbursement of Term Loan in January 2007 by the Syndicate Banks all the running expenses of the company till to date, have been paid from the funds injected by Promoters as loan. We are hopeful and steadily moving towards our targets.
Considering genuineness of our case, we request you to allow us extension for 1 year from the applicability of provisions of Section 305 (c) of the Companies Ordinance, 1984.
For more information, contact:
Dost Steels Limited
Plot No: 222, Sector 39, Korangi Creek,
Industrial Area, Karachi- 74900
Ph: (92-21) 11 STEELS (783357)
Fax: (92-21) 5110423