Chenab to raise Rs 160 million through preference shares, 9.25 percent dividend offer

Chenab Ltd, one of the country's leading textile products manufacturers and exporters, will raise Rs 160 million through its preferred shares and plans to pay 9.25 percent dividend per annum on this issue, the company said.
A Pre-IPO signing ceremony and investor conference was arranged for the upcoming Rs 800 million listed cumulative preferred equity issue of Chenab Limited. This would be the largest preferred issue and the first of its kind listed preferred equity instrument of an unlisted company.
The issue has generated a lot of interest among large institutional investors which was evident from the diverse investor base which has subscribed the private placement of Rs 640 million.
The Preference Shares will be cumulative in nature with a dividend rate of 9.25 percent per annum.
The proceeds of the issue will be utilised by Chenab Limited for balance sheet optimisation. The resulting financial flexibility will enable the Company to meet WTO challenges and pursue further expansion and diversification opportunities.
The Company has obtained relevant approvals from the Karachi Stock Exchange. Approval from the Securities & Exchange Commission of Pakistan (SECP) is in process for the Public Issue of PKR 160 million offered at par. The subscription is expected to take place in the last week of August/ first week of September 2004.
United Bank Limited (UBL) is acting as Financial Adviser, Lead Arranger, and Lead Underwriter for the Issue. Jahangir Siddiqui Capital Markets (Pvt) Ltd (JSCM) is the Lead Manager for the Issue.
Chenab Ltd (Chenab) is regarded as one of the leading manufacturers and exporters of quality home textiles products and woven fashion garments world-wide.
Operational since 1975, Chenab is a vertically integrated unit and houses one of the largest textile processing facilities in the country which can meet varied requirements of its customers with in-house facilities of ginning, and spinning cotton into yarn, weaving it into fabrics in 100 percent cotton and various mixed blends, and stitching and export of top quality made-ups and garments. Chenab today is capable of processing and converting into made-ups and garments more than 65 million metres fabric per annum.
Chenab is the first ISO-9001 certified company in textile sector in Pakistan, which is the recognition of Chenab's high quality and good performance. Chenab has been awarded various honours including the 'Best Export Performance Trophy Award' for 2001-02 for the 7th time.
The annual turnover of the group in FY 2004 is c.PKR 5.0 billion. The Group provides employment opportunities to more than 7,500 families.
The Group has exhibited substantial growth over the last five years with revenues growing at a CAGR of 11 percent and operating profit at 15 percent.
The Company has responded to the ever-changing needs of the market through constant innovation and adaptation.
Chenab offers a wide range of co-ordinated concepts in bed linen, bedspreads, and kitchen accessories. It also produces men, women and children's formal and casual garments. Being supplied to leading brands around the world for quarter of a century, these products from Chenab are highly reputed and widely respected for the quality of fabric, variety of designs and superior finish.
Some of their main customers who spread across five continents include IKEA, Tommy Hilfiger, Fedrated, JCPenney, Sears, Target Corp, Mervyns's, Wall Mart Stores Inc, Kellwood, Revman Industries, Manor Park, CGI etc.
In November 1997, the Group launched its own fashion brand by the name of ChenOne. In a short span of six years, ChenOne, with its outlets in eight cities of Pakistan, has already acquired the position of leading fashion brand of Pakistan.
The success of ChenOne concept has forced rapid expansion. There are now five stores in Middle East at Dubai, Abu Dhabi, Sharjah, Ajman, Makkah and Bahrain.
The expansion map for Pakistan has marks on Multan and Sialkot as next destinations and international operations are targeting Jeddah and Riyadh as new ChenOne cities.
Future expansion plans for ChenOne include opening up of retail outlets in other three GCC countries viz. Kuwait, Oman and Qatar. Brand development through ChenOne Stores will prove a risk-balanced strategy in its own right for home textiles and woven fashion garment manufacturers like Chenab over longer term.