July 12, 2021 (MLN): The Board of Directors of Image Pakistan Limited resolved to increase the ordinary Paid-up Capital of the company from Rs568.79mn to Rs995.386mn by issue of further 42,659,401 ordinary shares of the company.
These shares, having value of Rs10 each will be offered to the shareholders of the company in proportion to the numbers of shares held by each shareholder (i.e., as right issue), at a price of Rs15 per share including a premium of Rs5 per share.
The quantum of the right issue is 75% of the existing paid-up capital of the company i.e., 75 right shares for every 100 ordinary shares held by the shareholders of the company.
The purpose of the right issue is to meet the capital requirements of the company to effectively implement its business plan with the objective to increase the company’s profitability.
The Company’s intention behind the right issue is to raise funds for expansion of existing production capacity through the installation of new Schiffli embroidery machines so as to reduce reliance on outsourcing embroidery for manufacturing quality products and cost-saving, opening of 10 new outlets in different cities and to meet the working capital requirements. Thus, to increase Company's profitability.
The subscription amount from the Right Issue will enable Company to implement its capacity expansion plans and to make available the required liquidity for meeting its working capital requirements. Effective implementation of the business plan is expected to positively impact the profitability of the Company, which in consequence would benefit its shareholders.
With regards to risk factors associated with the Right Issue, the company informed that the issue of right is being made at a price that is less than the current share price in the market, and hence there is no major investment risk associated with the Right Issue.
Copyright Mettis Link News