WAVESAPP to raise Rs1.5bn via 56% right issue

July 23, 2026 (MLN): Waves Home Appliances Limited (PSX: WAVESAPP) will raise its paid-up capital by issuing 150,015,772 right shares, its Board of Directors decided at a meeting held on 23 July 2026.

The right shares, having a face value of Rs10 each, will be offered to existing shareholders in the ratio of 56 shares for every 100 shares held, i.e. 56.00% of the company's existing paid-up capital. The shares will be issued at Rs10 each, at par and without any premium.

Following the issue, the company's paid-up share capital will increase from Rs2,678,853,070 to Rs4,179,010,790. The new shares will rank pari passu with the company's existing ordinary shares in all respects.

The book closure dates to determine shareholder entitlement will be announced separately once the offer letter/document is finalized, in line with the Companies (Further Issue of Shares) Regulations, 2020.

The right issue is aimed at strengthening the company's financial position and supporting its medium-term operational and growth objectives.

Proceeds will be used to broaden the company's product portfolio, fund working capital requirements, and reduce high-cost liabilities, including a loan payable to holding company Waves Corporation Limited.

The company noted it has recently re-entered the air conditioner market and intends to further expand in this segment while continuing to invest in its deep freezer and refrigerator businesses.

Of the total proceeds of Rs1.50bn, about Rs800.16m (53.3%) will go toward working capital needs tied to the company's air conditioner market expansion and continued investment in the deep freezer and refrigerator segments, along with reducing reliance on bank borrowing.

The remaining Rs700m (46.7%) will be used for partial repayment of the loan payable to the holding company.

The company said the right issue will strengthen its working capital base, lower its high-cost liabilities and finance cost, and improve its gearing ratio, while also supporting liquidity, portfolio diversification, and long-term value creation for shareholders.

On risk factors, the company flagged the possibility of undersubscription given the offer is priced at par, which is higher than the current market price.

Substantial shareholders and directors have confirmed they will subscribe to their respective entitlements, while the remaining portion will be underwritten.

Additionally, the holding company has committed to subscribing to any unsubscribed portion of the issue, in excess of its own entitlement, under Section 83(1)(a)(iv) of the Companies Act, 2017.

The company clarified that the justification for issuing shares at a premium is not applicable, as the shares are being issued at par value, which is itself higher than the prevailing market price.

The board, having considered the company's break-up value, discounted cash flow valuation, and long-term business prospects, believes the issue price of Rs10 per share is fair and reasonable. A minimum subscription amount has not been prescribed.

The aforementioned information was disseminated through a notification to Exchange.

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