Karachi May 24 2023: Gul Ahmad Textile Mills Limited, Pakistan's one of the top textile exporter decided to raise the additional funds through issuance of equity in place of expensive borrowing as government ends concessionary financing.
The Management is of the view that considering the world and country's economic situation, the cost of raising borrowed funds would be higher and is not expected to decrease in next few years. Moreover, even with gradual reduction, the same is not expected to reach at level of 2022 in next 5-7 years. Further, the support extended by the Government, in past, in the form of concessionary financing is not expected to be revived. In view of same, the management considers that raising of equity would be the most viable options in view of lower tax incidence in the hands of investors and as such maximum reliance would be placed on this option to meet the Company's growth plans. It is also important that fee for increase in authorized capital has been recently increased considerably and a 10% increase has also been mentioned in the relevant notification in subsequent year.
In view of foregoing, it is proposed to increase the Authorized Capital to Rs.50 billion enabling the Management to implement its growth plans without repeated formalities and keep the same as smooth and cost effective as possible. For this purpose, it is intended to pass with or without modification the following resolutions as Special Resolutions in extraordinary ordinary general meeting to be held on June 14, 2023.
It is proposed to increase the Authorized Share Capital from Rs.7.5 billion to Rs.50.0 billion to facilitate further issue of capital according to the requirements of the Company. For this purpose, it is intended to pass with or without modification the following resolutions as Special Resolutions:
a) Resolved that the Authorized Share Capital of the Company be and is hereby increased from Rs.7.5 billion to Rs.50.0 billion by the creation of 4,250,000,000 ordinary shares of Rs.10/- each. Such new shares, whenever issued, shall rank pari passu with the existing shares.
b) Further Resolved that in view of the increase in Authorized Share Capital, Clause 5 of the Memorandum of Association be and is hereby amended to read as under:
"The capital of the Company is Rs.50,000,000,000 (Rupees fifty billion) divided into 5,000,000,000 ordinary shares of Rs.10/- (Rupees ten) each. The Company shall have the power to increase, reduce or re-organize the capital for the time being into several classes in accordance with the provisions of the Companies Act, 2017."
c) Further Resolved that the Chief Executive Officer or Secretary of the Company be and are hereby
authorized singly to comply with all formalities in this regard.