Synthetic Products Enterprises Limited has announced to issue 3,981,978 shares through Right Issues to meet its upcoming Capex Requirement.
It is pertinent to note that SPEL is expanding its capacity and establishing a new plant in Karachi. In this regard, SPEL will issue 4.5% of the existing paid-up capital of the Company i.e. 4.5 right shares for every 100 ordinary shares held by the shareholders of the Company. These shares will be offered to the members as Right Shares, at a price of PKR 32 per Share (including a premium of PKR 22 per Share) aggregating to a total of PKR 127.4 million.
The announcement came in Board of Directors meeting held on 17-September-2020 to discuss the Financial Performance of the company for the year ended June-2020.
SPEL announced PKR 258mn profit for the year ended June-2020 as compared to PKR 241mn in 2019. Company managed to increase its profitability despite decrease in sales. SPEL was able to fetch better operating margins as lower Oil prices helped lower the raw material cost.
It is to be highlighted that the Rights Issue has been announced at a price below the current market price. The stock price was down 5% in day trading as market participants downplay the Right Issues and fear further dilution of Price.
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