KESC approves 31 percent rights shares issue

[LahoreEstate]

KARACHI (May 28 2009): Karachi Electric Supply Company (KESC), in order to improve operational and financial viability and the profitability of the company, has approved issue of 31 percent right shares. In a meeting held on Wednesday the board of Directors approved the issue of 31 ordinary right shares for every 100 ordinary shares held by the shareholders at par (Rs 3.50 per share).

It said that the right issue will rank pari passu with the existing ordinary shares of the company in all respects. These shares will provide fresh equity and as a result improve debt equity and liquidity ratios, reduce cost of financing and enhance profitability for the benefit of all the stakeholders.

Injection of economic and efficient generation in KESC system and implementation of system improvement and loss reduction projects will be partially funded through additional equity.

Funds generated through right shares will be utilised to partly finance equity component of new generation projects and current requirement to augment and expand dilapidated transmission and distribution network. They will help meet working capital deficit to reduce bank borrowings. The rights issue is expected to positively contribute towards the future financial results of the company, the statement added.-PR

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