Lahore: Dost Steels Limited, a company listed within the construction and materials sector on the Pakistan Stock Exchange (PSX), has announced a significant increase in its paid-up share capital. The Board of Directors of the company, in a meeting held on May 26, 2025, has resolved to issue an additional 860,695,577 ordinary shares. This issuance will be executed through both a Right Issue and a direct allocation of shares, pending necessary approvals.

According to the official communication from Dost Steels Limited, the Right Issue will involve the issuance of 444,695,577 shares. These shares, each with a face value of PKR 10, will be offered at a discounted price of PKR 9 per share. The offering is structured to provide existing shareholders the opportunity to acquire approximately 100 new shares for every 100 shares they currently hold.

In addition to the Right Issue, the company will allocate 416,000,000 shares directly to investors Mr. Muhabbat Khan, Mr. Zahir Khan, and their nominees. These shares, also with a face value of PKR 10, will be offered at PKR 5 per share, reflecting a discount of PKR 5 to par. This direct allocation is contingent upon the approval of the company's shareholders and the Securities & Exchange Commission of Pakistan.

The proposed investment from Mr. Muhabbat Khan and Mr. Zahir Khan amounts to PKR 2.08 billion. This capital influx is integral to a restructuring agreement with a consortium of banks, under which the company will repay PKR 2.08 billion in sixteen quarterly installments. The restructuring agreement is supported by personal guarantees from the investors.

According to information available from the Pakistan Stock Exchange (PSX), these strategic initiatives are designed to enhance the financial stability of Dost Steels Limited. The proceeds from the capital increase will be utilized to strengthen the company's balance sheet and repay existing bank loans, thereby improving the company's financial leverage.

The detailed resolutions passed by the Board include specifics on the quantum of the issue, pricing, and intended use of proceeds. The statement indicates that the company is committed to optimizing shareholder value and mitigating associated risks through this strategic capital restructuring.