Attock Refinery Denies Sale Rumors, Stock Price Drops

In recent developments, Attock Refinery Limited (ATRL) has found itself at the center of attention due to swirling rumors regarding a potential sale. On Monday, the company took a firm stance, categorically denying these speculations. In a notice to the Pakistan Stock Exchange (PSX), ATRL stated, "no such matter is under consideration," aiming to reassure its stakeholders amidst the uncertainty.

The refinery's management addressed these rumors during a corporate briefing session held on November 8, 2024. They emphasized that inquiries from shareholders and analysts had prompted the need for clarification. ATRL reiterated, "We wish to clarify that no such matter is under consideration," effectively putting an end to the chatter surrounding a possible sale.

In addition to addressing the sale rumors, ATRL's management also discussed the company's readiness to sign the new refinery policy. However, a note from Arif Habib Limited (AHL) highlighted that recent changes in the Finance Act 2024, specifically regarding the Sales Tax Act 1990, could pose challenges. These changes could potentially hinder incentives and increase operational costs for the company, as there would be no input tax adjustments against output taxes. Consequently, the signing of the new policy has been postponed until these issues are resolved.

ATRL's management expressed optimism, stating that the government has committed to addressing these concerns. They believe that the matter is expected to be resolved within a week, specifically between November 10 and November 15, 2024. However, it is noteworthy that AHL's commentary did not mention any potential sale rumors, focusing instead on the operational challenges faced by the refinery.

The impact of these developments was immediately felt in the stock market. Following the notice, ATRL's share price experienced a significant drop during intra-day trading. The price plummeted from Rs526 around 12:55 PM to Rs453 within a matter of minutes, ultimately closing at Rs473 by the end of trading on Monday.

Attock Refinery, incorporated in Pakistan on November 8, 1978, has a long-standing history in the oil refining sector. Initially established as a private limited company, it transitioned to a public company on June 26, 1979. As a subsidiary of the Attock Oil Company Limited in England, its ultimate parent company is Coral Holding Limited, a private limited company based in Malta.

While the rumors of a sale have been firmly dismissed by ATRL, the company faces significant challenges ahead, particularly concerning the new refinery policy and the implications of recent tax changes. Stakeholders will be keenly watching how these issues unfold in the coming weeks, as they could have lasting effects on the refinery's operations and market performance. The situation serves as a reminder of the volatility in the business environment and the importance of clear communication between companies and their investors.