Karachi: Mughal Iron & Steel Industries Limited has approved the issuance of 33,062,447 Class C ordinary shares under Section 58 of the Companies Act, 2017, as sanctioned by the company's board of directors in a meeting on November 5, 2024. The term sheet outlines the issuance details, including the right issue size, price, and premium, as well as the rights and conditions associated with the Class C shares.
According to the plan, the authorized capital of Mughal Iron & Steel was increased from Rs. 5 billion, represented by 500 million ordinary shares of Rs. 10 each, to Rs. 10 billion. This adjustment allows for the issuance of 700 million ordinary shares, 250 million ordinary Class B shares, and 50 million ordinary Class C shares, each with a nominal par value of Rs. 10 per share.
The issuance of Class C shares is set to occur by way of a right issue to existing ordinary shareholders of the company. The right issue ratio is set at 9.85 ordinary Class C shares for every 100 ordinary shares held. The right issue price for the Class C shares is Rs. 45 per share, with a share premium of Rs. 35 per share, resulting in right proceeds totaling Rs. 1.49 billion.
According to information available from the Pakistan Stock Exchange (PSX), the terms and conditions of the issuance were initially approved by the shareholders during an extraordinary general meeting on September 19, 2023. Subsequently, these terms were amended under a direction from the Securities & Exchange Commission of Pakistan dated February 19, 2025.
Class C shares will not be redeemable and are non-convertible into ordinary shares. They carry a par value and an issue price of Rs. 10 per share. The shares provide participatory rights in surplus assets in the event of liquidation. In general meetings, each Class C share will carry five voting rights. Additionally, holders will be entitled to dividends or bonus shares as declared by the company.
Post completion of the right issue, Mughal Iron & Steel Industries Limited plans to list the Class C shares, further enhancing their market presence within the designated market category.