Karachi: In a strategic move to increase its paid-up share capital, Bawany Air Products Limited has announced the issuance of 1.20 billion new shares. This decision was made during the Board of Directors' meeting on August 26, 2024.
The company, complying with section 96 of the Securities Act 2015 and clause 5.6.1(a) of PSX Regulations, will distribute approximately 600 million shares as Right Shares and another 600 million shares Otherwise than Right. According to information available from the Pakistan Stock Exchange (PSX), the Right Shares will be offered at PKR 10 per share, matching the face value, and will be available to existing shareholders in a proportion of approximately 7997.32 for every 100 ordinary shares held.
Further, the company has engaged in a Share Purchase Agreement (SPA) with the sponsor shareholders of Alman Seyyem Sugar Mills (Pvt.) Limited (ASSML). Under this agreement, Bawany Air Products will acquire 100% of ASSML’s shareholding, which involves 51.11 million shares priced at PKR 234.77 each, totaling PKR 12 billion. As part payment, 600 million shares will be issued to the ASSML shareholders Otherwise than Right, contributing to a face value of PKR 6 billion.
This share issuance is aimed at consolidating Bawany Air Products’ market position by acquiring ASSML and is contingent upon approval from the company’s shareholders and the Securities and Exchange Commission of Pakistan. The benefits of this strategic move include enhanced operational capabilities and market expansion, although it also carries inherent risks associated with large-scale acquisitions.
Shareholders of the company and relevant market authorities have been duly informed as the company prepares for the next stages of this significant corporate action. The resolutions regarding the issues detail the quantum, size, price, and purpose of the share issues, as well as the expected utilization of proceeds, highlighting the strategic intent behind the share distribution.