Amreli Steels Faces Tough Year Amid Financial Restructuring

Karachi: Amreli Steels Ltd. (ASTL) held its fiscal year 2025 analyst briefing, revealing significant declines in sales and production due to ongoing financial restructuring. The company reported a 59% decrease in sales, dropping to PkR16.1 billion from PkR38.8 billion in the same period last year, mainly attributed to a sharp decline in rebar sales.

ASTL’s utilization rates also fell markedly, down to 11% from 28% the previous year. The company sold 72,000 tons of rebar compared to 157,000 tons in the prior year, constrained by a shortage of working capital and the temporary shutdown of its Site Rolling Mill.

The management disclosed that the company implemented a premium charge of PkR25-30k per ton on rebars during this period. However, due to raw material shortages, ASTL focused on retail sales and reduced its presence in government and institutional markets.

Despite these challenges, ASTL reported a reduced loss of PkR3.8 billion for FY25, down 16% from a loss of PkR6.1 billion in FY24. This decrease was partly due to a tax reversal.

In an effort to stabilize its financial situation, Amreli Steels has entered a Master Restructuring Agreement with its lenders. Under this agreement, principal and mark-up payments are deferred by 2-3 years during a moratorium period. Additionally, a short-term facility of about PkR11 billion will be converted into a long-term facility with a 10-year repayment plan, including a 3-year grace period.

To alleviate working capital pressures, ASTL plans to sell non-core assets valued at approximately PkR4 billion and secure an additional PkR1 billion equity injection from its sponsor.