KARACHI, Dec 15: Chenab Limited would issue Initial Public Offering (IPO) of 15 million shares at subscription price of Rs18 per share (inclusive of premium of Rs8 per share).

The company said that an "emergent" meeting of the Board of Directors would be held on December 18 at the company's registered office in Nishatabad, Faisalabad for the approval of the IPO.

In a statement filed under section 160(1)(b) of the Companies Ordinance, 1984, the company declared that it was proposing to raise funding by issue of 15 million ordinary shares at Rs18 per share through an initial public offering without offering the same to the existing shareholders, to facilitate compliance with the requirement of KSE and SECP for listing of the company shares on the KSE.

Chenab Limited stated that it required additional funding to meet increasing challenges as well as to capitalize on opportunities in a post-WTO scenario, to fund domestic expansion requirements, to meet working capital requirements, to repay certain long-term loans for any purposes allowed under the Memorandum and Articles of Association of the Company.

The company stated: "The sponsor shareholders of the company are proposing the offer to the general and/or specific investors out of their existing shareholding, 15 million shares at Rs18 per share, jointly with the IPO of the company".

Chenab Limited announcement said that the sponsors intended to invest 60 per cent of the proceeds received from offer for sale by the sponsors in the company by way of subordinated loans for a period of four years, which would substantially improve the liquidity and equity base of the company. The offer would surely be after the completion of all regulatory and shareholders' approval.