Divestment of Engro Eximp Agriproducts (Private) Limited

Staff Report :

ISLAMABAD: In a notice to the exchange, Engro Holdings (ENGROH) informed that Engro Corporation has entered into a Share Purchase Agreement (SPA) for the sale of Engro Eximp Agriproducts (Private) Limited (EEAP).

The Board of Directors of Engro Corporation has approved the decision to divest its stake in EEAP. The share purchase agreement has been made with MAP Rice Mills Pvt Ltd., an affiliate of Bestway Group.

The transaction is valued at Rs2.4bn, based on a debt-free and cash-free valuation. Completion of the transaction is subject to the fulfillment of certain conditions, as mutually agreed upon by both parties.KSE-100 Drops 202 Points Amid Volatility

The actual cost of the subsidiary EEAP on Engro’s books is reported at Rs7.5bn as of December 2023. The company has also recorded a provision for impairment of Rs3.9bn in Engro Eximp Agriproducts (Private) Ltd. through 2023, bringing the net book cost down to Rs4.25bn.

Based on these figures, Engro may record a one-time loss of Rs1.8bn, which translates into a loss of Rs0.9 per share after tax adjustment (39%), impacting 4-5% of earnings.

ENGROH is currently trading at a 2025/2026 PE of 9.6x/7.9x.