FFBL to raise Rs4.99bn to reduce debt levels

Fauji Fertilizer Bin Qasim Limited has decided to increase the paid-up share capital of the company by the issue of a further 357,142,857 ordinary shares.

As per the filing issued at the Pakistan Stock Exchange (PSX) on Tuesday, the shares will have a face value of Rs10 each, as Right Shares.

The statement read that the ordinary shares will be offered to the members in a proportion of 38.2335 Right Shares for every 100 ordinary shares held i.e. 38.2335 percent, at a price of Rs14 per Right Share (inclusive of a premium of PKR 4 per Right Share).

The company informed that the purpose of the Right Issue is to raise Rs 4.99 billion sum to reduce current debt levels, manage working capital, and to support subsidiaries.

The company said that the decision to issue ordinary shares will have several benefits including; reduction in debt level will mitigate the adverse impact on the profitability on account of financial charges; the optimized working capital will ensure the smooth operation of the company; it will lead to value addition in the subsidiaries and will also help to maintain a healthy debt to equity ratio.