PSX:HUBC STOCK INFORMATION
Date
Nov , 24 2017
Closing Rate 101.82
Volume
454,200

Growth Aspirations

To launch new initiatives, the Company has formed wholly-owned subsidiaries. For investing in the imported-coal based 1,320MW power project and other future growth initiatives, the Company has incorporated Hub Power Holdings Limited (HPHL). Hub Power Services Limited (HPSL), a wholly owned subsidiary, has been incorporated to manage O&M of its existing power assets, its future projects and explore onshore and offshore O&M business opportunities. Another wholly-owned subsidiary, Narowal Energy Limited, has taken over the assets and liabilities of Narowal Plant post its demerger under the repealed Companies Ordinance, 1984.

1,320 MW Coal Project - China Power Hub Generation Limited (CPHGC)

To undertake the imported coal-based power project through HPHL, Company has set up China Power Hub Generation Company (Pvt.) Ltd. (CPHGC) with its joint venture partner China Power International Holdings (CPIH).

The EPC contractor has mobilized on Site since August 2016 and the Project is progressing according to the plan with the target to achieve COD by August 2019. The Company has also initiated the process for increasing its shareholding to 47.5% in the Project following the exercise of its Call Option in January 2017 as per the Shareholders Agreement.

The call option exercise process is expected to be completed post Financial Close of the Project. The Company and its joint venture partner, China Power International Holdings Limited (CPIH) have signed an MoU with Government of Balochistan to allocate 1.5% equity stake each in the Project free of cost to the Government of Balochistan before the Commercial Operations Date of the Project.

CPHGC has obtained credit committee approval from the Chinese banks and are working towards achieving Financial Close before the LOS expiry date of December 7, 2017.

330 MW Coal Project - Thar Energy Limited (TEL)

To set up a 330 MW mine mouth coal power Plant at Thar Coal Block II Sindh, the Company has established Thar Energy Limited, as a wholly-owned subsidiary of The Hub Power Co. Ltd.

The EPC Contract for the Project has been signed with China Machinery and Engineering Corporation (CMEC) which has started preliminary activities on Site to expedite the Project construction and achieve the RCOD as per the PPA in December 2020. The PPA and CSA for the Project were signed on July 27, 2017 and May 13, 2017 respectively. The IA has been initialed while the Water Use Agreement is also under execution.

Fauji Fertilizer Company will be joining the Project as a strategic investor with 30% equity stake while CMEC would take 10% shares. The Company is in the process of finalizing the Shareholders Agreement. The Company has engaged China Development Bank (CDB) as the lead arranger for the foreign financing from China and Habib Bank Limited as the lead arranger for the local financing.

Investment in Sindh Engro Coal Mining Company (SECMC)

Hubco is investing USD 20 million in Sindh Engro Coal Mining Company Limited (SECMC), a joint venture between Hubco, Engro, Thal Limited, HBL, CMEC, and Government of Sindh, to develop a coal mine at Thar which has the seventh largest reserve of coal in the world.

Post the financial close in April 2016, the Project construction is progressing satisfactorily. The Company has 8% stake in the Project. The Project is 8% ahead of schedule with production commencement expected to be in June 2019.