Topline Securities Limited - Dawood Hercules (DAWH) Flash Note: Dawood Hercules (DAWH): Tower deal hits snag

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Flash Note: Dawood Hercules (DAWH): Tower deal hits snag

VEON limited (NASDAQ: VEON), having controlling interest in PMCL (Jazz) in its official press release today (posted on veon.com) has notified regarding termination of its towers sale to Tanzanite Tower Limited (subsidiary of Edotco Pakistan, of which DAWH was acquiring 45% stake).
The deadline for closure of deal was Sept 14, 2018. However, due to non receipt of regulatory approvals deal has been terminated, as per VEON announcements.
As per our industry sources, there was not any financing/pricing related issue on this deal and has been subject to security concerns. However, upon clearance of security related issues, deal may materialize in future.
In case, if deal does not materialize, we eye this as negative event for the company as DAWH was targeting IRR of ~23% on its Edotco’s investment. While, surplus/idle cash (around ~Rs18bn) will hardly earn 8-10% return now by parking in T-bills or government securities, we believe.

17/09/2018 3 EN

Underlying

Dawood Hercules

Co. is engaged in the production and sale of urea fertilizer for the agricultural sector.

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PK0017501013 Pakistan Stock Exchange Pakistan

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Topline Securities Limited

Topline Securities is one of the fastest-growing brokerage houses in Pakistan. It has strong Equity Brokerage, Economic/ Equity Research, Commodity Trading and Corporate Finance & Advisory functions.

Topline Securities has been endowed with numerous awards by renowned international financial organizations. The highlights of which consists of the award for ‘Best Local Brokerage House of Pakistan’ by Asiamoney Brokers Poll (the largest Asia-focused equity services provider poll) in 2016 and ‘Best Equity Brokerage House’ by CFA Society Pakistan in 2015.

Previously, Topline Securities held the title for ‘Best Brokerage House’ for 4 consecutive years (2011-2014) by Asiamoney Brokers Poll. Other awards include the ‘Best Salesperson’ award by Asiamoney for 6 consecutive years (2011-2016), the ‘Arabia Fast Growth 500’ award and ‘Pakistan Fast Growth 100’ award in 2012 and 2013 by AllWorld Network.

JCR-VIS, a credit rating agency providing independent rating services in Pakistan has assigned initial rating of “A-2” for short term and “A” for long term to Topline Securities. Topline Securities is registered as Underwriter, Book Runner and Research Entity with Securities & Exchange Commission of Pakistan (SECP).

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Topline Research

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Flash Note: Dawood Hercules (DAWH): Tower deal hits snag

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