Kohinoor Textile ups share in Maple Leaf

The SECP “has granted permission under Sections 84 and 86 (1) of the Companies Ordinance, 1984 to Maple Leaf.

KARACHI: Kohinoor Textile Mills Limited has received permission to increase its stake in Maple Leaf Cement Factory Limited (MLCF) by 15 per cent.

According to a notification issued by the Karachi Stock Exchange on Monday, the Securities and Exchange Commission of Pakistan “has granted permission under Sections 84 and 86 (1) of the Companies Ordinance, 1984 to Maple Leaf Cement Factory Limited for issuance of a further 153.84 million ordinary shares of Rs10 each at Rs6.50 per share ie at a discount of Rs3.50 per share, otherwise than through a right issue up to the extent of Rs1 billion, to Kohinoor Textile Mills Limited.”

The notification also disclosed that Kohinoor Textiles has issued a letter to MLCF, confirming its intent to purchase additional shares in the company.

Kohinoor currently holds 186.6 million ordinary shares of Maple Leaf constituting 50 per cent of the existing issued, subscribed and paid-up capital.

After the proposed acquisition is completed, Kohinoor’s stake in MLCF will rise to 65 per cent.

“MLCF has faced climbing debt obligations and they had trouble in meeting some of these in the past,” commented Standard Capital Head of Research Faisal Shaji. “The current increase in paid-up capital will help them repay debt,” he added.

“Cement dispatches from the company will likely remain unaffected but the financial position of MLCF will improve,” said Shaji.

Experts have also speculated that board of directors at MLCF may also be reconstituted following the deal.

Published in The Express Tribune, August 24^th, 2010.