Unity Foods sees no material progress in terms of deployment of funds during Oct -Dec 2020

February 03, 2021 (MLN): Unity Foods Limited has submitted a progress report on the utilization of proceeds of the second Right Issue of 375 million shares. As per the report, the acquisition of the Crude Palm Oil (CPO) refinery is already completed and after taking physical possession of the CPO refinery the asset was transferred in the books of the Company, and production was also commenced.

The related formalities of Port Qasim Authority are under process and are expected to be completed shortly.

The process of proceeding with the utilization of the 2nd Right issue of the Company remained slow during the quarter Oct-Dec 2020 to underreport due to the second wave of COVID-19 linked slowdown. The assets acquired from the proceeds of the right issue to date have immensely benefited the Company and its sales have witnessed a steady rise since then. The company's quarterly sales since the announcement of 2nd right issue are summarized below:

The company stated that there has been no significant new acquisition of assets and also no major deployment of funds in other areas like civil construction as businesses have not fully gathered momentum and they remained slow and were not fully geared to render the requisite services. Therefore, no material progress in terms of deployment of funds has taken place during Oct-Dec 2020 quarter. The proposed plan of asset acquisition remains largely on hold. Most of the construction and other work has also either slowed down or completely stopped during this period.

Measures to control COVID-19 that slowed or halted business activities are expected to yield results in the coming months and as soon as it is deemed beneficial for the Company and circumstances permitting, the funds would be deployed to acquire/construct the requisite assets. The Company expects to restart the activities as soon as the overall economic situation improves and the business environment becomes conducive towards capitalization and expansion. The overall plan relating to asset acquisition and other related activities, as per Right Issue proceeds utilization announced in February 2019 remained largely on track.

The company is hopeful that the deployment of proceeds of the 2nd right issue will be completed as per the schedule announced with the right issue.

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