15. TERM FINANCE CERTIFICATES (TFCs)

Term finance certificates (TFCs) , which are an obligation of the Company’s majority owned subsidiary, WTL, have a face value of $17.60 per certificate. These TFCs carry a mark up (interest) at the rate of six months average KIBOR plus 1.0% per annum (2024: six month average KIBOR plus 1.0% per annum), payable quarterly. The mark up rate charged during the six months ended June 30, 2025 on the outstanding balance ranged from 13.03% to 17.45% (2024: 17.45% to 24.08%) per annum.

IGI Holding Limited (previously IGI Investment Bank Limited) is the Trustee (herein referred to as the Trustee) under the Trust Deed.

The liability of these TFCs has been rescheduled in December 2012 and then on April 3, 2015. During the 2018 year, a third rescheduling of these TFCs was successfully executed through signing of the Third Supplemental Trust Deed between the Trustees and the Company.

In accordance with the 3rd Supplemental Trust Deed executed during the year 2018, the outstanding principal is repayable by way of quarterly staggered installments with downward revision in markup (interest) of 0.60% — i.e. revised markup of six months average KIBOR + 1%. The outstanding markup payable as of the date of restructuring and up to December 20, 2018 was agreed to be deferred and was be paid from March 20, 2021 in quarterly installments. 50% of the markup accrued for the period between December 20, 2018 to December 20, 2020 was to be paid on a regular quarterly basis commencing from March 20, 2019 and the remaining 50% was to be deferred and paid from March 20, 2021. Markup deferred has been measured at present value. Under the revised term sheet, these TFCs are due to mature on September 20, 2026.

The other main terms included appointment of one representative as a nominee director nominated by the Trustee which has been complied with. Further, 175 million shares of WTL held by its sponsor (WSL) are pledged for investors which will be released with quarterly scheduled principal repayments proportionately starting from June 2019.

The Company has not paid due quarterly installments from June 2019 to June 2025, amounting to USD 3.20 million against principal and USD 3.97 million against accrued mark up. In case of failure to make due payments by the Company, the Trustee can instruct the security agent to enforce the letter of pledge and sell the quantum of the pledged shares to generate the amount required for the settlement of the outstanding redemption amount.

Due to the non-payment of due installments, the Trustee enforced the Letter of Pledge in 2021, calling 128.2 million shares from WSL’s account. Of these, 63.98 million shares were sold, generating USD 0.57 million. The proceeds were utilized to settle USD 0.35 million against the principal and USD 0.22 million against accrued markup in 2021 and 2022.

These TFCs are secured against first pari passu charge over the Company’s present and future fixed assets including equipment, plant and machinery, fixtures excluding land and building with 25% margin in addition to all rights, benefits, claims and interests procured by the Company under: