Engro corporation divests Engro Eximp Agriproducts to Map Rice Mills for PKR 2.4 billion

Engro Corporation Limited announced on Wednesday the divestment of its wholly owned subsidiary — Engro Eximp Agriproducts — to MAP Rice Mills, an affiliate of the Bestway Group.

The transaction, valued at PKR 2.4 billion, is structured on a debt-free and cash-free basis and is subject to corporate and regulatory approvals.

Engro Holdings Limited, formerly Dawood Hercules Corporation Limited, announced the development in a notice to the Pakistan Stock Exchange (PSX).

"The board of Engro Corporation Limited has authorized the company to enter into a Share Purchase Agreement (SPA) for the sale of Engro Eximp Agriproducts (Private) Limited," the notice stated.

Financial impact on Engro Corporation

According to Engro Corporation’s 2023 financial accounts, the investment in Engro Eximp Agriproducts was recorded at PKR 7.53 billion. However, the company had already booked an impairment provision of PKR 3.27 billion, bringing the net book value down to PKR 4.26 billion.

With the divestment deal finalized at PKR 2.4 billion, Engro Corporation is expected to record a one-time loss of PKR 1.86 billion. This translates to an estimated loss of PKR 1.54 per share booked by Engro Holdings Limited (ENGROH), according to a report by Arif Habib Limited (AHL), a leading brokerage house.

The report suggests that the financial impact of the transaction could be partially mitigated if Engro books additional impairment provisions on the subsidiary before finalizing the sale. Meanwhile, Engro Holdings' stock is trading at a Price-to-Earnings (P/E) ratio of 9.6x for 2025 and 7.9x for 2026, reflecting investor sentiment toward the company's future growth potential.

The completion of the transaction will be contingent on the fulfillment of certain conditions mutually agreed upon by both parties. Investors will closely monitor further updates as Engro Corporation advances its corporate restructuring efforts.