KARACHI: The Board of Directors of Karachi Electric Supply Company in its meeting on Friday approved the issue of 7.25 percent Right Share, subject to approval of SECP, ie 29 ordinary right shares for every four hundred (400) ordinary shares held by stakeholders at par ie Rs 3.50 per share. The right issue shall rank pari passu with the existing ordinary shares of the company in all respects.
The right shares are being issued to provide fresh equality which will support the capital expenditure requirements, improve debt equity and liquidity ratios, reduce finance cost and will improve profitability of the company to benefit all the stakeholders.
Injection of economic and efficient generation in KESC and implementation of system improvement and loss reduction project will improve operational and financial viability and profitability of the company. Partial funding the said projects will improve operational viability and profitability of the company. Partial funding the said projects through additional equity will reduce financing cost and positively contribute to future financial results of the company.
Funds generated through Right Shares will be utilised to partly finance equity component of new generation projects and capex requirement to augment and expand dilapidated transmission and distribution network and system improvement and loss reduction projects and to meet capital deficit to reduce bank borrowing and resultant financing cost.
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