The Pakistan Oxygen Limited (PAKOXY), engaged in the manufacturing of industrial and medical gases, said on Monday it will raise Rs749.8 million through a rights issue of 13.86 million shares at a price of Rs54 per share.
The company, in its notice to the Pakistan Stock Exchange (PSX), said that it will issue 13,885,973 ordinary shares at a price of Rs54 per share, (i.e. inclusive of a premium of Rs44 per share) aggregating to Rs 749,842,542.
“Right shares to be offered to the members of the company in proportion of approximately 18.96 right shares for every 100 ordinary shares held i.e. approximately 18.96%,” stated the notice.
The company said that the funds will be utilised to meet the increased working capital requirements of the company and maintenance of plant and machinery in order to enhance the profitability of the company and, consequently, returns to the shareholders.
PAKOXY is principally engaged in the manufacturing of industrial and medical gases, welding electrodes and marketing of medical equipment.
The company said the issue is being carried out at a price which is less than the current share price in the market and hence there is no major investment risk associated with the right issue.
“Normal risks associated with the business will remain; however, the company is well placed in the market, which will help to mitigate such risk factors,” it said.
“The right issue is being carried out at a premium. Considering the current market price of the company, the premium charged over the par value is justified and is also in line with the prevailing market practice.
In fact, the right issue price constitutes approximately 25% discount to the prevailing market price,“ Pakistan Oxygen said.
At the time of filing, the shares of PAKOXY were being traded at Rs69.00, down by Rs3.30 or 4.56%.
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