KARACHI: Philip Morris (Pakistan) Ltd on Tuesday proposed to issue preference shares of up to Rs11 billion.

It stated in a filing with the stock exchanges that the board had approved an irredeemable, non-voting, non-cumulative and convertible preference shares at Rs10 per share to Philip Morris Investments BV and Philip Morris Brands Sarl, which own 77.65 per cent and 20pc ordinary shares of the company, respectively.

The issue was being made to tide over the “increasing financing costs coupled with planned capital expenditures”. An extraordinary general meeting of shareholders has been called on Oct 28 to discuss and approve the issuance.

The issuance was subject to all regulatory approvals. The first tranche of Class A preference shares of Rs7.5bn would be issued before June 30, 2016 while the remaining Rs3.5bn would be issued by Dec 31, 2017.

To ensure sufficient working capital and to retire its liabilities of various lenders, the company had been evaluating options for raising financing, up to Rs11bn, including but not limited to issuance of new shares.

“The company is now proposing that the entire amount be raised by equity investment,” directors said, adding that the board believed that in the light of company’s financial performance, there would be low investors confidence and the shares, if offered locally, will not be fully subscribed and as a result an issue of shares with rights was not feasible.

Published in Dawn, October 7th, 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play