Pakistan Oxygen Limited (POL), a leading manufacturer of industrial and medical gases, has decided to issue Right shares to its existing shareholders, aiming to secure fresh financing totaling Rs749.84 million. This move is in response to the company’s growing working capital needs and its commitment to enhancing profitability through the maintenance of essential plant and machinery.
In a notification submitted to the Pakistan Stock Exchange (PSX), the company secretary, Mazhar Iqbal, disclosed that the Right shares would be distributed to POL’s shareholders at an approximate ratio of 18.96% for every 100 ordinary shares, priced at Rs54 per share.
Remarkably, the Rs54 offer represents a premium of Rs44 per share, while still providing a substantial 25% discount compared to the current market price. Following this announcement, the company’s stock price saw a minor dip of 3.61%, closing at Rs69.69, with a trading volume of 49,400 shares on Monday at the PSX.
Explaining the rationale, Iqbal stated, “The purpose of the Right issue is to meet increased working capital requirements of the company and maintenance of plant and machinery in order to enhance the profitability and, consequently, returns to the shareholders.” In a meeting held on September 1, the company’s BoD approved the issuance of an additional 13.88 million ordinary shares, each with a face value of Rs10. This decision is expected to boost POL’s paid-up share capital from Rs732.38 million to Rs871.24 million.
Published in The Express Tribune, September 5th, 2023.
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