Pakistani conglomerate Engro eyes global expansion

Pakistan’s largest conglomerate Engro aims to expand globally, targeting the Middle East, Central Asia, and Africa, Dawood Hercules Corp, owning 40% of the company’s shares said.

The chemicals-to-energy company is also seeking new LNG and hydrogen energy ventures.
The group aims to have a couple of overseas operations in developing countries over the next five years, according to Abdul Samad Dawood, Vice Chairman at Dawood Hercules and the sponsor of the group. The process is in early stages and could include taking control of some of the companies, Dawood said in an interview in Karachi.

In the Middle East and Central Asia, Engro eyes telecom infrastructure, while Africa beckons for fertilizer expansion. Despite being a powerhouse in Pakistan, with interests spanning energy, fertilizer, telecom, and consumer goods, Engro now seeks international horizons.
With assets worth $2.9 billion and a market cap of $694 million, Engro’s influence is significant.

Their flagship LNG terminal in Karachi caters to 15% of Pakistan’s gas needs, a pivotal role in the nation’s energy landscape.

The investments will be “like a very Berkshire Hathaway-esque sort of an approach.” The group will also look at deals in Pakistan outside its conventional businesses, said Dawood.

Even after divesting coal assets, Engro remains committed to energy, exploring sustainable options like hydrogen. The quest for energy security in Pakistan drives further investment in the sector.

The late Shahzada Dawood’s vision fuels Engro’s global aspirations, despite tragedy striking during the Titan’s voyage. “He (Shahzada) was much more of a dreamer and pushing us to become more international and building that curiosity and engaging with the outside world,” Dawood said.

The shares of Dawood Hercules Corp., the group’s investment arm, have surged by over 60% this year.

Engro Corp, Dawood Hercules agree to restructuring deal

Engro Corp and Dawood Hercules Corp greenlit a restructuring plan on Monday, aiming for greater capital flexibility. The proposal, pending final approvals, seeked to optimize investment avenues by aligning the strengths of both entities.

The envisioned restructuring entails DH Corp rebranding as Engro Holdings Ltd., with Engro Corp transitioning into its wholly owned subsidiary. This shift ensures seamless capital flow and preserves minority shareholders’ economic interests.

The move facilitates synergistic investments under Engro Holdings, enhancing capital deployment across a wider spectrum of opportunities. Shareholders of both entities stand to benefit from this streamlined approach.

Samad Dawood emphasized the restructuring’s goal: facilitating participation in diverse economic opportunities. Engro’s expanded mandate includes exploring investments stemming from multinational corporations divesting from Pakistan’s markets, poised to harness broader prospects.

“This restructuring is an extension of our unwavering commitment to progress and is aligned with the interests of all shareholders, employees, and communities connected to Engro. By widening our investment horizon, Engro will be further enabled to partner with Pakistan to solve some of the most pressing issues of our time,” Chairman Hussain Dawood stated.

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