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ENGRO: Analyst Briefing Highlights FY Dec 2023

Engro Corporation (ENGRO) is in advanced discussions with Liberty Power for the potential sale of its stakes in:

  • Engro Powergen Qadirpur (EPQL) (68.9% stake)
  • Engro Powergen Thar (EPTL) (50.1% stake)
  • Sindh Engro Coal Mining Company (SECMC) (11.9% stake)

Share sale is the planned divestment method.

Accounting Remeasurement: A non-cash adjustment of PKR 13.0 billion was made by ENGRO to its thermal portfolio to address accounting specificities for Pakistani IPPs that can cause discrepancies between reported profitability and actual cash flows during initial project years. This adjustment aims to rectify this disparity and reflect fair value.

**Financial Implications: **
The PKR 13.0 billion adjustment is non-cash. The potential sale to Liberty Power is expected to result in a one-off gain for ENGRO, considering the anticipated transaction value exceeding the book value of the thermal portfolio.

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