January 25, 2022 (MLN): Crescent Star Insurance Limited (CSIL) intends to raise Rs1 billion to clear the bank defaulted amount of Dost Steel Limited (DSL) and provide working capital required for the operations of DSL, subject to the issuance of 78.66 million shares and regulatory approvals, the company’s filing on PSX showed today.
As per the notice, these options are currently being discussed in the investment committee of CSIL„ which has been asked to recommend the best option which will then be approved by the CSIL board to be included in the plan for DSL.
In the light of the recent events in which CSIL along with the support of over 10% of shareholders of DSL had requisitioned EOGM of DSL on 11th February exercising the right with the agenda of appointing independent auditors and to replace the existing board of DSL with the nominees of CSIL, the board reviewed CSIL stake in DSL which is:
1) Advance against the issuance of shares Rs354 million. Pending the decision of the honorable Lahore High Court, if approved CSIL will be issued 78.66 million shares at Rs4.50/ share. Upon issuance of such shares the revised capital of DSL will be 394 million shares, resulting in 20% holding of CSIL in the diluted capital. For the sake of clarity, CSIL has assigned Rs57 million to Din Corporation (12.6 million shares — 3.2% holding). This assignment has been made against SPA signed between CSIL and Din Corporation for a swap of shares of Crescent Star Foods (Pvt) Ltd currently held by Din Corporation.
2) Interest of Rs.248 million has been charged by CSIL which current DSL management continues to resist acceptance, however, CSIL reserves its right to continue the claim and seek all legal remedies that are available.
The board reviewed the management's strategy to continue the legal remedy and expect the issuance of shares subject to the approval of the court.
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