ISLAMABAD (January 18 2003) : The Hub Power Company (Hubco) is unlikely to announce interim dividend for the shareholders in its half-yearly board meeting to be held in a couple of weeks, sources close to Chief Executive, Hubco, Vince Harris, told Business Recorder. They said that the company has also decided to deliver the benefit of loan rescheduling with the National Bank of Pakistan to the Water and Power Development Authority (Wapda), rather than stakeholders. When contacted Sardar Yusuf Khan, a Hubco spokesman, confirmed that dividend would not be announced in the half yearly meeting. However, he added that the company would announce dividend in a subsequent meeting. On Friday, Harris was in the federal capital to address the Board of Directors of Islamabad Stock Exchange (ISE) where he spelled out the problems in re-negotiation of loans with the international lenders. Regarding rescheduling of international loans, he said that Hubco was started in a period when there were not too many regulations other than Companies Ordinance. According to the Project Co-ordination Agreement (PCA) signed with the lenders many covenants were very restricted. There was a definite schedule with specified dates and amounts to pay in dollars in 30 years; that schedule dictates the dates and amounts for the payments. In the meantime, a lot has happened in Pakistan. “But now we have a problem as a month has been allowed to report on sixth month annual accounts,” he said, adding that “now if we go to the lenders for reduction in lending rates, the lenders would not be ready to slash them.” So, he said, “the problem is that we have to have more board meetings than the original plan and, in fact, now we cannot show that we have a board meeting to pitching with work and early in the last month.” He said: “I do not want to make a big issue here but we have very formal contracts with the lenders several years ago and their re-negotiations require money and time to deliberate the issue with 49 lenders.” He surmised that Japanese lenders would not be ready to hear such a thing. He said that under the Power Purchase Agreement (PPA) with Wapda, there are many items “which we call isolated items” and certainly the financing part is pass through. “The Wapda chairman and the Ministry of Finance have a good understanding of the issue as we had gone through a lot of efforts last year to reduce interest rate on the loans” keeping in view that it was a burden on Wapda. “Shareholders do not derive any benefit, and anything I can say is that they could derive only confidence of knowing that they are delighted customers,” he added. He praised Wapda Chairman Lieutenant General Zulfiqar Ali Khan (Retd) for extending all-out support at a time when Hubco’s transformer was damaged and the former said that the utility’s every facility was at his disposal. “General Zulfiqar and I myself also discussed the Hubco contract after which we have good relationship, understanding and support and credit goes to Wapda,” he said. Harris said that Pakistan has improved its position for foreign investment and improvement in the stock exchange was a real proof. He further said that power tariff would be reduced by one-third after two-and-a-half years when senior debt would have been repaid to the lenders. Replying to a question, Harris said that the government has no right to charge Rs 802 million from Hubco as ‘first fill’, as this amount has to be paid by Water and Power Development Authority. “Hubco will neither pay the amount, nor it has received any directive from the government,” Harris clarified. He said that the stock market of Pakistan was performing well on its fundamentals and there is a ray of hope that it will become still better in future because the overall conditions of law and order in the country have improved. He applauded the economic policies of the government and said all credit goes to President Pervez Musharraf who, with his dedication, has improved the governance in the country. He said, “Now we are hopeful that the overall conditions in Pakistan are investor-friendly and foreign investors are being urged to invest in Pakistan”. He said that Hubco is the largest power project listed on the stock exchange. Pakistan was lacking foreign investment, which has now quite improved during the last three years. In his address, ISE Chairman Chaudhry Muhammad Sharif thanked Vince for sparing time to visit the ISE. He said that in a short span of 10 years, ISE had become a vibrant, efficient and stable market. The chairman said that the ISE has planned to start a series of initiatives to educate the investors. Appreciating the Hubco, the ISE chairman said that it is a jewel of the stock markets of Pakistan. PPI ADDS: A board meeting of Hub Power Company, which runs biggest private sector 1292MW power project in Hub, Balochistan, is due in early February and the company would be advising Karachi Stock Exchange in accordance with the Listing Rules. A press release issued by Hubco in Karachi on Friday said the principal business of this meeting will be to approve the second quarter results for December 31, 2002, which are required to be published before the end of February. The agenda is being finalised. “In accordance with our agreements with lenders the Board will only be able to declare a dividend with lenders approval, if given, at a subsequent meeting to be held in March or April,” it stated.