TRG Pakistan Limited, a shareholder in The Resource Group International Limited (TRGI), announced on Friday that TRGI’s portfolio company, Afiniti Limited, has reached an agreement with its senior lenders on a comprehensive balance sheet restructuring plan. This plan is set to significantly enhance Afiniti’s financial position and growth prospects within the dynamic AI technology industry.

According to a stock filing to the Pakistan Stock Exchange (PSX), the restructuring plan involves a substantial reduction of Afiniti’s current senior debt and a multi-year extension of its debt maturity. Additionally, the plan includes a recapitalization of Afiniti’s balance sheet, with senior lenders, existing preferred shareholders (including TRGI), and Afiniti management retaining significant equity interests in the business on a fully diluted basis.

The restructuring will also enable Afiniti to significantly reduce cash interest payments. Combined with additional financing, this will provide the resources needed to accelerate the company’s growth.

“This restructuring provides significant value and upside potential for TRG Pakistan, whose indirect economic stake in Afiniti will be substantially retained in percentage terms on a fully diluted basis,” the stock filing stated. Further details will be provided by Afiniti upon the closing of the restructuring transaction.

The completion of Afiniti’s restructuring is subject to court approval in Bermuda and the United States and is expected to occur before the end of the year.

TRG Pakistan, through TRGIL, primarily invests in a portfolio of companies in the technology, IT-enabled services, and medicare insurance sectors.

At the time of the announcement, TRG’s stock was trading at Rs. 54.8, down 0.9 percent or Rs. 0.5, with over 2.24 million shares traded on Friday.