Euro Oil (Private) Limited, incorporated in 2016 and licensed by OGRA as an OMC in 2018, operates in the procurement, storage, and marketing of petroleum products and PETRONAS lubricants. The Company has grown organically, primarily through expansion of its retail network and storage infrastructure, and currently operates 173 retail stations, including 19 CoCo sites, with its footprint concentrated across Punjab. Operations are largely driven by PMG and HSD, which together accounted for over 98% of FY26 sales volumes. The Company holds ~1.2% market share and operates an owned ~12,800 MT depot at Sahiwal, with further storage capacity planned at Sahiwal, Daulatpur, and Kohat. The entry of BB Energy as a ~20% strategic shareholder in 2020 strengthened the Company’s capital base and procurement capabilities, while the PETRONAS distribution agreement further diversified its product offering. Overall, Euro Oil has demonstrated steady organic growth, supported by network expansion, strategic partnerships, and continued investment in storage and distribution infrastructure.

Euro Oil’s ownership remains closely held, with Umer Mujib Shami and associates holding 38.5%, Adnan Nasir and associates 38.5%, BBE D PTE. LTD. holding 20.0%, and Sohail Ahmad holding 3%. The ownership structure has remained stable since BB Energy’s strategic investment in October 2020, reducing the likelihood of disruptive changes in control. The sponsors bring significant experience across the energy, trading, and commercial sectors, while BB Energy provides strategic depth through its global energy supply chain, particularly supporting the Company’s procurement and import operations. The domestic sponsors have demonstrated a willingness and capacity to provide financial support, while BB Energy’s substantial financial scale further strengthens sponsor backing. Overall, the closely held ownership structure, experienced sponsors, and strategic international partnership provide a supportive foundation for the Company’s financial strength and business continuity.

Euro Oil’s Board comprises seven members, including four Executive and three Non-Executive Directors, with separate Chairman and CEO roles, supporting a clear distinction between governance and executive management. The Board is supported by four committees covering audit, financial and risk management, IT and innovation, and HR and remuneration, with regular meetings and adequate documentation indicating effective oversight. The Board benefits from a mix of local commercial expertise and international energy sector experience, including representation from BB Energy, although the absence of independent directors remains a governance gap. Financial transparency is supported by an unqualified FY25 audit opinion from M/s UHY Hassan Naeem & Co., a QCR-rated firm and Category A auditor on the SBP panel, with no qualifications, emphasis-of-matter, going-concern modifications, or prior-period restatements reported. Overall, governance and financial reporting practices appear satisfactory, with scope for further strengthening through the induction of independent directors.

Euro Oil has a structured management hierarchy headed by the Board of Directors, with the CEO supported by the COO and CFO and functional departments reporting through the Deputy Managing Director. The governance framework is further strengthened by dedicated management committees covering strategy, finance, operations, risk, compliance, HR, and technology, while the internal audit function maintains dual reporting to the Board Audit Committee and CEO, supporting oversight independence. The senior management team demonstrates relevant industry experience, although the CEO and COO remain key-person concentration points, with succession arrangements not explicitly disclosed. Management stability has remained satisfactory, with no material executive turnover noted. The Company’s SAP Business One-based MIS, implemented in 2018 and maintained through regular updates, supports financial reporting, procurement, inventory management, and operational integration. Internal audit operates with quarterly reporting, while the Board Audit and Compliance Committee meets several times during the year, indicating an established governance and internal control framework.

Pakistan’s downstream petroleum sector remains a critical component of the economy, with petroleum consumption growing ~6% to 16.7mn MT in FY25, while OMC sales increased ~4% during the first four months of FY26, supported by continued demand for core fuels. The sector remains highly concentrated, with the top ten OMCs accounting for 93.8% of fuel volumes, while regulated OGRA margins provide earnings stability but limit margin upside, and the sector remains exposed to FX, commodity price, regulatory, and inventory risks. Euro Oil holds a relatively modest ~1.2% market share, with a concentration in Punjab, but continues to expand its footprint. The Company’s revenues increased 8% to PKR 67,730mln in FY26, supported by volume growth, while gross, operating, and net margins improved to 5.2%, 3.1%, and 1.8%, respectively (FY25: 3.9%, 1.6%, and 0.6%). Going forward, planned additions to storage capacity in Sahiwal, Daulatpur, and Kohat, alongside new retail sites in Punjab, are expected to strengthen the Company’s distribution network and support further volume growth.

The Company maintains a stable working capital position, with net working capital days at negative 4 days in FY26, despite inventory days increasing to 24 days (FY25: 17 days), while receivable and payable days stood at 8 days (FY25: 7 days) and 36 days (FY25: 27 days), respectively. Coverages remained comfortable, supported by strong FCFO and effective debt management, with FCFO of ~PKR 1,056mln in FY25 and ~PKR 708mln in 6MFY26, while interest cover improved to 3.5x in 6MFY26 from 3.2x in FY25. As of FY26, shareholders’ equity stood at PKR 3,488mln against total debt of PKR 7,354mln, resulting in leverage of 46.6%. Going forward, the Company’s financial flexibility will depend on maintaining adequate coverage and balancing debt growth with equity accumulation, particularly given the capital-intensive nature of OMC operations.

Euro Oil (Pvt.) Limited is set to issue a short-term, rated, secured, and privately placed Sukuk of up to PKR 2,000 million, which includes a PKR 500 million green shoe option. The instrument carries a six-month tenor with an indicative profit rate of 6-Month KIBOR plus 150 bps, aimed at fulfilling the company’s short-term working capital requirements. The instrument features a bullet repayment of the total principal amount plus profit on maturity. The instrument is backed by a structured Debt Payment Account (DPA) build-up, requiring 100% in the final 07 days of maturity, alongside a mandatory 4x cash flow throughput requirement routed through designated collection accounts held under lien.

The Sukuk Issue is secured by ranking charge over current assets in favour of the Investment Agent, for the benefit of the Sukuk Holders, with a 25% margin over the outstanding issue amount.

The company shall maintain a dedicated Debt Payment Account ("DPA") under lien with the investment agent, to be build up in the last 60 days (last two months) of Sukuk Maturity with complete funding to be arranged 7 working days before Maturity Date. All identified business collections of the company shall be routed through designated collection accounts maintained with Askari Bank (Arranger Bank) during the tenor of the Sukuk. The routed collections shall amount to not less than four times the Sukuk issue size over the tenor. For avoidance of doubt, for a PKR 2,000 million Sukuk with a six-month tenor, aggregate collections of PKR 8,000 million shall be routed through Askari Bank, translating into approximately PKR 1,333 million per month (minimum throughput) during the Sukuk tenor. DPA shall be filled through these collections on the respective due dates and askari bank, acting as an account bank will inform the investment agent accordingly. The Issuer shall provide irrevocable instructions to Askari Bank, the account bank, that all collections from the designated accounts to be routed directly into a Collection Account. This Collection Account shall remain under lien in favor of the trustee agent for the entire tenor of the Sukuk. The investment agent will continue to monitor the collection account and in case of any shortfall in the minimum throughput, the company is bound to route extra cash flows to the collection account to achieve the minimum agreed throughput.