Bawany Air Products Limited (PSX: BAPL) has decided to proceed with a rights issue of 599,999,732 ordinary shares to raise approximately Rs5.99 billion. The proceeds will be used to meet the company’s working capital requirements and support the completion of a major project being developed by its subsidiary, Alman Seyyam Sugar Mills Limited (ASSML).
The decision was approved by the company’s Board of Directors at a meeting held on September 2, 2026, according to a notice submitted to the Pakistan Stock Exchange. The rights issue was initially approved by the board on August 26, 2024, and was later amended in accordance with directions issued by the Securities and Exchange Commission of Pakistan on June 26, 2025. The company said all other terms of the original approval will remain unchanged, except for adjustments to the rights entitlement percentage and shareholding structure resulting from its earlier issuance of shares otherwise than right.
Under the proposed offering, BAPL will issue shares with a face value of Rs10 each to existing shareholders at par. The entitlement ratio has been set at approximately 98.765 right shares for every 100 ordinary shares held, representing an entitlement of nearly 98.765%. At the issue price of Rs10 per share, the total size of the rights issue will amount to Rs5,999,997,320.
BAPL said the funds raised through the offering will primarily be allocated toward working capital requirements and the completion of ASSML’s sugar manufacturing project. The project involves a sugar plant with a crushing capacity of 10,000 metric tons per day and is currently under construction in Dera Ismail Khan. Major components for the facility are being sourced from Pakistan, the United Kingdom, Germany, Japan and China.
According to the company, the ASSML facility is expected to provide the subsidiary with a significant presence in both domestic and international markets through the production of refined white sugar and molasses. The project represents a major component of BAPL’s expansion following ASSML becoming a subsidiary of the company after an earlier issuance of shares otherwise than right.
The board said the rights issue is also expected to further strengthen BAPL’s asset base. Going forward, the company plans to present its consolidated financial statements alongside those of ASSML, reflecting the subsidiary’s growing importance within the group structure.
Regarding the investment considerations associated with the offering, BAPL noted that the rights issue price is below the company’s prevailing market price. Based on this pricing structure, the board stated that no major investment risk is associated with the rights offering. The company’s substantial shareholders and directors have also confirmed that they will subscribe to, or arrange subscription for, their respective rights entitlements.
Any portion of the rights issue that remains unsubscribed will be fully underwritten in accordance with applicable regulations. The company has not prescribed any minimum subscription amount for the offering, allowing the issue to proceed under the stated entitlement and underwriting arrangements.
The board has authorized BAPL’s directors, chief financial officer and company secretary to complete the offer document and coordinate with the Securities and Exchange Commission of Pakistan and Pakistan Stock Exchange. They will also be responsible for finalizing the issue schedule and completing other necessary steps required to execute the rights issue.
The proposed Rs5.99 billion fundraising will therefore provide BAPL with additional resources for its immediate working capital requirements while supporting the completion of ASSML’s large scale sugar project. The company’s latest move also reflects the increasing role of ASSML within BAPL’s consolidated business structure.
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