ADVICE FOR INVESTORS
INVESTMENT IN EQUITY SECURITIES AND EQUITY-RELATED SECURITIES INVOLVES A CERTAIN DEGREE OF RISK. THE INVESTORS ARE REQUIRED TO READ THE RIGHTS SHARE OFFER DOCUMENT (HEREIN REFERRED TO AS 'OFFER DOCUMENT')AND RISK FACTORS CAREFULLY, ASSESS THEIR OWN FINANCIAL CONDITION AND RISK-TAKING ABILITY BEFORE MAKING THEIR INVESTMENT DECISION IN THIS OFFERING.
RIGHT ENTITLEMENT LETTER IS TRADABLE ON PSX, RISKS AND REWARDS ARISING OUT OF IT SHALL BE THE SOLE LIABILITY
OFTHE INVESTORS.
THIS DOCUMENT IS ISSUED FOR THE PURPOSE OF PROVIDING INFORMATION TO SHAREHOLDERS OF THE COMPANY AND TO
THE PUBLIC IN GENERAL IN RELATION TO THE RIGHTS ISSUE OF PKR 507,641,190/- CONSISTING OF (14,504,034) NEW
ORDINARY SHARES OF PKR 35/- EACH BY FARAN SUGAR MILLS LIMITED. A COPY OF THIS DOCUMENT HAS BEEN REGISTERED
WITH THE SECURITIES EXCHANGE. THIS OFFER DOCUMENT IS VALID TILL MARCH 4, 2025 (60 days from the last day of
payment of the subscripon amount)
Faran Sugar Mills Limited
Right Share - Offer Document
Registered Office: 43-1-E(B) Block 6, P.E.C.H.S., off Razi Road, Shahrah-e-Faisal, Karachi, Pakistan, Contact
Details: Phone + 92 21 34322851-54, Email: m.ayub@faran.com.pk, Website: h ps://faran.com.pk/, Contact
Person: Muhammad Ayub - Company Secretary, Date of Incorpora on: November 03, 1981, Company
Registra on No.: K-161/6698, Share Registrar: M/s. C & K Management Associates (Pvt) Limited, Address: M
13, Progressive Plaza, Civil Lines Quarter, Near P.I.D.C, Beaumont Road, Karachi, Tel: (92-21) 35687839. Fax:
(92-21)32421010 Email: zakir@cnk.com.pk, website: hps://cnk.com.pk/
Circular under Sec on 83(3) of the Companies Act, 2017 and Schedule 1 under the Companies (Further Issue of Shares) Regula ons, 2020 for issue of 14,504,034 (Fourteen Million Five Hundred Four Thousand Thirty Four only) ordinary shares by way of Rights (i.e. 58% of the exis ng paid-up capital of Faran Sugar Mills Limited) at an offer price of PKR 35/- per share (i.e. including a premium of PKR 25/- per share) for an aggregate issue size of PKR 507,641,190/- (Pak Rupees Five Hundred Seven Million Six Hundred Forty One Thousand One Hundred Ninety) at a rao of 58 rights shares for every 100 shares held.
Date of placing offer document on PSX for Public Comments
Date of Final Offer Leer
Date of Book Closure
Last Date for Payment of Subscription Amounts
Trading Dates for Leer of Rights
Website address to download Offer Document
Not opted for public comments
November 15, 2024
November 22, 2024 to November 29, 2024
January 3, 2025
December 5, 2024 to December 27, 2024
hps://faran.com.pk/
OFFER DOCUMENT | FARAN SUGAR MILLS LIMITED
Details of Relevant Contact Person
Descrip on | Name | of | Designa on |
person | |||
Authorized Officer | Muhammad | Company | |
of the Issuer | Ayub | Secretary | |
Underwriters:
Contact
Number
-
92 21-
34322851-4
Office Address
43-1-E(B) Block 6, P.E.C.H.S., off Razi Road, Shahrah-e- Faisal, Karachi
Email ID
m.ayub@faran.com.pk
Underwriter | Name of | ||
person | |||
Topline | Mr. | ||
Muhammad | |||
Securi es | |||
Nadeem | |||
Limited | |||
Growth | |
Securi es | Mr. Zeeshan |
(Pvt.) | |
Limited | |
Designaon
Head of
Corporate
Finance and
Advisory
Director
Contact
Number
+92 21
35303347
+92 21
32463002
Office
Address
8th Floor, Horizon Tower, Plot # 2/6 Block-3, Clion, Karachi
Room # 82
83, Second
Floor,
Pakistan
Stock
Exchange
Building,
Stock
Exchange،
Road,
Karachi,
Email ID
mohammad.nadeem@topline.com.pk
investmentbanking@growthsecuries.com
Bankers tothe Issue:
Bankers | Name | of | Designa on | Contact | Office Address | Email ID |
person | Number | |||||
Meezan | Ammar | VP-Deputy | 021- | Meezan House C- | Ammar.farooqi@meezanbank. | |
Bank | Farooqi | Manager | 38103500 | 25, Estate | com | |
Limited | 021- | Avenue SITE, | ||||
37133500 | Karachi |
This Offer Document can be downloaded from Right Share Offer - Faran Sugar Mills Limited INVESTOR RELATIONS - Faran Sugar Mills Ltd.and hps://www.psx.com.pk/
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OFFER DOCUMENT | FARAN SUGAR MILLS LIMITED
ISSUER UNDERTAKING
Page 3 of 28
OFFER DOCUMENT | FARAN SUGAR MILLS LIMITED
UNDERTAKING BY BOARD OF DIRECTORS
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OFFER DOCUMENT | FARAN SUGAR MILLS LIMITED
1. DISCLAIMER:
In line with the Companies Act, 2017 and Companies (Further Issue of Shares) Regula ons, 2020, this document does not require approval of the Securi es Exchange and the Securi es and Exchange Commission of Pakistan (SECP).
The Securies Exchange and the SECP disclaim:
- Any liability whatsoever for any loss however arising from or in reliance upon this document to anyone, arising from any reason, including, but not limited to, inaccuracies, incompleteness and/or mistakes, for decisions and/or acons taken, based on this document.
- Any responsibility for the financial soundness of the Company and any of its schemes/projects stated herein or for the correctness of any of the statements made or opinions expressed with regards to them by the Company in this Offer document.
- Any responsibility with respect to the quality of the Issue.
It is clarified that informa on in this Offer document should not be construed as advice on any par cular maer by the SECP and the Securies Exchange and must not be treated as a substute for specific advice.
Page 5 of 28
OFFER DOCUMENT | FARAN SUGAR MILLS LIMITED
GLOSSARY OF TERMS & DEFINITIONS
ASBA
BoD
CDC
CDS
Company or Issuer
Companies Act
IAS
LoR
MLS
NICOP
PKR or Rs
PSX or Securities Exchange
SECP or Commission
Application supported by Blocked Amount
Board of Directors
Central Depository Company of Pakistan Limited
Central Depository System
Faran Sugar Mills Limited
Companies Act, 2017
Investor Account Services
Letter of Right
Minimum level of subscription
National Identity Card for Overseas Pakistani
Pakistani Rupees
Pakistan Stock Exchange Limited
Securities & Exchange Commission of Pakistan
Page 6 of 28
OFFER DOCUMENT | FARAN SUGAR MILLS LIMITED
DEFINITIONS
Application Money
Banker to the Issue
Book Closure Dates
Issue
Issue Price
Market Price
Ordinary Shares
Regulations
Right Issue
Sponsor
The total amount of money payable by existing shareholders which is equivalent to the value of shares to be allotted.
Any bank with whom an account is opened and maintained by the Issuer for keeping the Issue amount.
Meezan Bank Limited has been appointed as Bankers to the Issue, in this Right Issue
The Book Closure shall commence from November 22, 2024 to November 29, 2024 (both days inclusive).
Issue of 14,504,034 Right Shares oftheCompanyrepresenting approximately 58% of the total paid-up capital of the Company.
The price at which Right Shares of the Company are being issued to the existing shareholders (PKR 35/- per share)
The latest available closing price of the share.
Ordinary Shares of Faran Sugar Mills Limited having face value of PKR10/- each.
The Companies (Further Issue of Shares) Regulations, 2020 https://www.secp.gov.pk/document/the-companies-further-issue-of- shares-regulations-2020-updated-march-4-2024/?wpdmdl=51188&refresh=66e2832547ebe1726120741
Shares offered by a company to its members strictly in proportion to the shares already held in respective kinds and classes.
A person who has contributed initial capital in the issuing company or has the right to appoint majority of the directors on the board of the issuing company directly or indirectly;
A person who replaces the person referred to above; and
A person or group of persons who has control of the issuing company whether directly or indirectly.
Page 7 of 28
OFFER DOCUMENT | FARAN SUGAR MILLS LIMITED | ||
Contents | ||
1 | SALIENT FEATURES OF THE RIGHT ISSUE | 9 |
1.1. | Brief Terms Of The Rights Issue | 9 |
1.2. | Principal Purpose Of The Issue And Funding Arrangements | 10 |
B) | Repayment of Loan | 11 |
1.3. | Financial Effects Arising From Right Issue | 11 |
1.4. | Total Expenses To The Issue | 12 |
1.5. | Details Of Underwriters | 12 |
1.6. | Commitments From Substantial Shareholders/Directors | 12 |
1.7. | Fractional Rights Shares | 13 |
1.8. | Important Dates | 13 |
2. | SUBSCRIPTION AMOUNT PAYMENT PROCEDURE | 13 |
3. | PROFILE OF BOARD OF DIRECTORS OF THE COMPANY AND SPONSORS | 15 |
3.1. | Profile Of The Board Of Directors Of The Company / Sponsors | 15 |
3.2. | Director Directorship in Other Companies | 17 |
4. | FINANCIAL DETAILS OF THE ISSUER | 19 |
4.1. | Financial Highlights of Issuer For Last Three Years | 19 |
4.2. | Financial highlights for the preceding year of consolidated financial | 19 |
4.3. | Detail Of Issue of Capital In Previous Five Years | 19 |
4.4. | Average market price of the share of the issuer during the last six months | 20 |
4.5. | Share Capital and Related Matters | 20 |
5. | RISK FACTORS | 22 |
5.1 Risk Associated With The Rights Issue | 22 | |
5.2 | Risk Associated With The Issuer | 22 |
5.3 External Risk Factors | 24 | |
6. | LEGAL PROCEEDINGS | 26 |
6.1. Outstanding Legal Proceedings Of The Company | 26 | |
6.2. Action Taken By The Securities Exchange Against The Issuer Or Associated Listed Companies Of | ||
The Issuer During The Last Three Years Due To Noncompliance Of The Its Regulations | 27 | |
6.3. Any Outstanding Legal Proceeding Other Than The Normal Course Of Business Involving The | ||
Issuer, Its Sponsors, Substantial Shareholders, Directors And Associated Companies, Over Which | ||
The Issuer Has Control, That Could Have Material Impact On The Issue | 27 | |
7 | SIGNATORIES TO THE OFFER DOCUMENT | 28 |
Page 8 of 28 |
OFFER DOCUMENT | FARAN SUGAR MILLS LIMITED
1 SALIENT FEATURES OF THE RIGHT ISSUE
1.1. Brief Terms Of The Rights Issue
a) | Description of Issue | Issuance of new ordinary shares by way of rights to |
existing shareholders of the Company, at PKR 35/- | ||
(Pak Rupees Thirty-Five only) per share, as per their | ||
proportional entitlement. | ||
The Company shall issue 14,504,034 (Fourteen Million | ||
b) | Size of the Proposed Issue | |
Five Hundred Four Thousand Thirty-Four only) | ||
ordinary shares, at a price of PKR 35/- (Pak Rupees | ||
Thirty-Five only) per share, aggregating to PKR | ||
507,641,190/- (Pak Rupees Five Hundred Seven | ||
Million Six Hundred Forty-One Thousand One | ||
Hundred Ninety). | ||
- Face value of the Share
- Basis of determination of the price of theRight Issue
PKR 10/- each
The Right Issue is being carried out at a premium. Considering the current market price of the Company, the premium charged over the par value is justified and is also in line with the prevailing market practice.
- Proportion of new issue to existing issuedshares with condition, if any
58 right shares for every 100 ordinary shares held by existing shareholders.
f) | Date of meeting of the BoD wherein the | |||
Right Issue was approved | August 26, 2024 | |||
g) | Names of directors attending the BoD | 1. | Mr. Muhammad Omar Amin Bawany - Chairman | |
meeting | 2. | Mr. Ahmed Ali Bawany - Chief Execu | ve |
- Mr. Hamza Omar Bawany - Non-Execu ve Director
- Mr. Bilal Omar Bawany- Execu ve Director
- Mr. Mohammad Altamash Ahmed Bawany - Non- Execu ve Director
- Mr. Irfan Zakaria Bawany - Non-Execu ve Director
- Mr. Ahmed Ghulam Hussain - Independent Director
- Mr. Khurram A ab - Independent Director
- Ms. Tasneem Yusuf - Independent Director
- Brief purpose of utilization of Right Issueproceeds
The proceeds shall be utilized towards funding the day- to-day working capital needs of the Company & repayment of loan, thus ensuring smooth business operations by maintaining liquidity levels. This would enable FRSM to have improved financial ratios and enhanced profitability which would collectively contribute to the maximization of shareholders' returns.
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