December 22, 2020 (MLN): The Board of Directors of Ghani Glass Limited, in its meeting held today, has approved to issue 55 % Right Shares (55 shares for every 100 shares held) in consideration of cash at par value of Rs. 10 per share.
As per the company’s notification, the issue size is Rs 2,978,484,663 divided into 297,848,466 ordinary shares which shall rank pari passu with the existing shares in all respect.
Meanwhile, it is pertinent to mention that the main purpose of the Right issue is to raise equity for the project of new float line and Balancing, Modernization and Replacement (BMR) of the existing lines.
• To install new Float Line;
• To achieve the economies of scale;
• To fulfill the demands of customers;
• To increase market share;
• BMR of Existing Lines
This right issue is expected to enhance production capacity and increase market share. The company would be benefitted from economies of scale. It will positively impact the profitability, benefitting the shareholders in the form of distribution of dividends; the company said in a notification to Exchange.
While with regards to risk factors associated with the Right Issue, the notification highlighted that there is no major investment risk as the right issue is being offered at a par value of Rs.10 per share which is lower than the market price. There is no major operational risk as the company has already been producing float glass. There is no major market risk as the company has a strong dealers’ network and dedicated sales force. However, the normal risks associated with the business would remain.
