Waves Home Appliances plans Rs1.5bn right issue to fund expansion, repay loan

Waves Home Appliances (WAVESAPP) plans to raise over Rs1.5 billion through a rights issue to expand its AC segment and partially repay a high-cost liability owed to its holding company.

According to the company’s rights issue documents, Waves will issue 150.02 million new ordinary shares at Rs10 per share, for an aggregate of Rs1.5 billion.

The issue will be offered to existing shareholders at their proportionate entitlement, with 56 right shares offered for every 100 ordinary shares held, representing 56% of the company’s existing share capital.

“Bank Makramah Limited (BML) has been appointed, in the right issue, as the banker to the Issue with whom an account is opened and maintained by the issuer for keeping the issue amount,” read the company’s document.

The right issue is being offered at par, with the company’s board determining the price at Rs10 per share based on the company’s breakup value and future potential.

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“The principal purpose of the rights issue is to strengthen the company’s financial position and support its medium-term operational and growth objectives.

“The proceeds will be utilised to broaden the company’s product portfolio, fund its working capital requirements, and reduce the company’s existing high-cost liabilities, including loan payable to the holding company.

“Having recently re-entered the air conditioner market, the company intends to expand its presence in this segment further while continuing to invest in its deep freezer and refrigerator segments, thereby broadening its product portfolio,” read the document.

Of the total proceeds, up to Rs800.16 million, or 53.3%, will be utilised to meet working capital requirements. The amount will also help reduce the company’s reliance on bank borrowings.

The remaining Rs700 million, or 46.7% of the proceeds, will be used for partial repayment of the loan payable to the holding company.

Waves shared that it intends to progressively increase production and sales by improving utilisation of its existing manufacturing platform, which has an installed capacity of approximately 482,500 units per annum.

“Planned production is expected to increase from 50,975 units in FY2026 to 110,000 units in FY2027, primarily across deep freezers, refrigerators and air conditioners, while production of washing machines, microwaves and water heaters is also planned to resume,” it added.

Waves Home Appliance Limited (formerly Samin Textiles Limited) was incorporated in Pakistan on November 27, 1989, as a public limited company under the Companies Ordinance, 1984.

The principal line of business of the company is to carry on the business of designing, manufacturing, processing, assembling, distributing, trading, repairing, reconditioning, importing, exporting, buying, or dealing in all kinds of domestic consumer appliances and other light engineering products.