Service Fabrics Ltd to offer further 234mn ordinary shares as Right issue

July 19, 2021 (MLN): Service Fabrics Limited has decided to increase the paid-up share capital of the Company by the issue of further 234,116,328 ordinary shares.

These shares will be issued at par value (i.e., at Rs. 10/- each) by the issue of Right Shares to be offered to the members in the proportion of approximately 1,486 Right Shares for every 100 ordinary shares held i.e., 1486% Right Issue at par value of Rs. 10/- per share.

To recall, the Honorable Lahore High Court, in its order dated June 28, 2021, has disposed of the winding-up petition against Service Fabrics, after the receipt of no objection from SECP and approval of revival business plan of the Company by shareholders in their Extra-Ordinary General Meeting, held on May 29, 2021.

The purpose of the Issue is to make Equity Investment in Kilowatt Labs technologies Limited (KLTL) and this investment is capped at Rs. 650,000,000/- (Rupees Six Hundred and Fifty Million only); Setting up of Calcium Carbide Plant in the Hattar Industrial Estate, Haripur up to Rs. 1,000,000,000/ (Rupees One Billion Only); Investment up to Rs. 400,000,000/- (Rupees Four Hundred Million Only) in the Equity Shares of Ghani Chemical Industries Limited; and Working Capital requirement including settlement of liabilities.

According to company’s notification to PSX, the difference will be made up from bank borrowings if total funds requirements exceed Rs2,341million.

The Company believes that such mode of financing/investment plans will contribute not only towards increased profitability that ultimately be translated into increased shareholders value.

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