Lahore February 7 2022:
Board of Directors of Pak Elektron Limited (the “Company”), in their meeting held on February 07, 2022 at Factory Premises have decided to increase the paid-up share capital of the Company by issue of a further 358,330,670 (Three Fifty Eight Million Three Hundred Thirty Thousand Six Hundred and Seventy) ordinary shares, having face value of PKR 10/- (Pak Rupees Ten) each, as Right Shares.
The right shares to be offered to the members in proportion of 72 Right Shares for every 100 ordinary shares held i.e. 72%, at a price of PKR 14/- (Pak Rupees Fourteen) per Right Share (inclusive of a premium of PKR 4/- (Pak Rupees Four) per Right Share).
A L S O || R E A D
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The share price plunged 4.5 percent or PKR 1.09 per share after the announcement in today’s trading at Pakistan Stock Exchange (PSX).
The proceeds from the Right Issue will be utilized towards reducing the Company’s current borrowings and will augment the Company’s liquidity in a more optimal capital structure with reduced leverage. This will improve the attractiveness of the Company for investors, owing to lower finance costs and improvement in margins. The proceeds of the right shares will also be utilized for meeting growing working capital requirements and paying for capital expenditure. The expected increase in profit in the long run would enhance the expected returns to the valued members and can then be available for, inter alia, distribution to the members by way of dividend and / or to meet any future capital expenditures.
The substantial shareholders and directors of the Company have confirmed that they shall subscribe to (or arrange the subscription of) their respective right entitlements, while the balance portion of the Right Issue will be underwritten in accordance with the applicable laws. The Right Issue of the Company is being made at PKR 14/- per share, which is less than the current share price in the market and hence there is no major investment risk associated with the Right Issue. Normal risks associated with the business will remain. The Company is well placed in the market with proven track record, which will help to mitigate such risk factors.