In a notice addressed to the exchange, Ghani Automobile Industries Limited (GAIL) is looking to seek approval from Board of Directors to issue 40 percent right shares of Rs. 10 each at a discounted price of Rs. 9 per share i.e. at 10 percent discount in proportion of 40 ordinary shares for every 100 ordinary shares.

Ghani Automobile Industries Limited hopes to increase the bottom-line profits by more than 400 percent over the course of next five years.

The company is seeking approval to “increase the paid up capital of the company from Rs. 500,000,000 to Rs. 700,000,000 by issuance of 20,000,000 ordinary shares to be offered as 40 percent Right Shares (40 ordinary shares for every 100 shares held) of Rs. 10 each in consideration of cash at discounted price of Rs. 9 per share i.e. at discount of 10%.”

Furthermore, on the previous issue, the company details mentioned that “The Company has issued 150% Right Shares at discount of 50% in 2014. The purpose of issuance of 150% right shares at a discount of 50% was debt servicing and meeting the working capital requirements of the company. Rs.91 M used for debt servicing and remaining for working capital. The total amount of capital injected was at Rs.150 M.”

The company keeping in view the risks mentioned that, “There is no major investment risk as the right issue is being offered at discounted price of Rs.9 per share which is lower than the par value as well as the volume weighted average daily closing price for ninety days prior to announcement of right issue.”