Issuance of Right Shares - Draft Offer Document

Mar 7, 2025 at 4:25 AM UTC · Issued by Pakistan Engineering Co. Ltd.

Offer Document		PAKISTAN ENGINEERING
	COMPANY LIMITED

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 CONDITIONS AND RISK- TAKING ABILITY BEFORE MAKING THEIR INVESTMENT DECISIONS IN THIS OFFERING.

RIGHT ENTITLEMENT LETTER IS TRADABLE ON PSX, RISKS AND REWARDS ARISING OUT OF IT SHALL BE SOLE

LIABILITY OF THE 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 284,512,300 CONSISTING OF 2,845,123 NEW ORDINARY SHARES BY PAKISTAN ENGINEERING COMPANY LIMITED. A COPY OF THIS DOCUMENT HAS BEEN REGISTERED WITH THE SECURITIES EXCHANGE.

THIS OFFER DOCUMENT IS VALID TILL [●]2025 (60 days from the last day of payment of subscription amount)

PAKISTAN ENGINEERING COMPANY LIMITED

RIGHT SHARE - DRAFT OFFER DOCUMENT

The Company:,

History & present Legal Structure: Date and place of incorporation: 15th February 1950, Lahore, Incorporation

number: 0000348, Head Office: 6/7-Sir Ganga Ram Trust Building, Shahrah-e-Quaid-e-Azam, Lahore, Contact No: +92-

42-35120755-56, Website:https://www.peco.com.pk/,Contact Person: Mr. Mian Anwar Aziz, Phone: +92-42-

35120755-56, Email: anwar.aziz@peco.com.pk. The company is a publicly traded entity listed on the Pakistan Stock Exchange Limited, with nearly 67% shares held by the general public and private shareholders while remaining shares are owned by State Engineering Corporation Limited (25%) and other Government owned / controlled entities. (8%). The company is governed under the Companies Act, 2017 in line with the legal opinions of Ministry of law and Justice, and Securities & Exchange Commission of Pakistan.

Issue Size: The Issue consists of 2,845,123 Right Shares (i.e. 50% of existing paid-up capital of Pakistan Engineering Company Limited) having face value of PKR 10/- each at an offer price of PKR 100/- each (including a premium of PKR 90/- per share). The total amount to be raised through the right issue is PKR 284,512,300.

Date of Placing Offer Document on PSX for Public Comments:	N/A (Public comments are not being sought)

Date of Final Offer Letter:	[●]	February 2025

Date of Book Closure:	From	[●]	2025 to	[●]	2025

Subscription Amount Payment Dates:	From	[●]	2025 to	[●]	2025

Trading Dates for Letter of Rights:	From	[●]	2025 to	[●]	2025

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Offer Document		PAKISTAN ENGINEERING
	COMPANY LIMITED

Website: This offer document is available for downloaded at:

https://www.peco.com.pk/
https://dps.psx.com.pk/company/PECO

Details of the relevant contact persons:

		Name of		Contact
Particulars	the	Designation	Office Address	Email ID
Number
		Person


	Authorized	Mr. Mian		+92 42	Peco Road,
	Company	Kot Lakhpat,
	Officer	Anwar	3512	anwar.aziz@peco.com.pk
	Secretary	Lahore,
	of the Issuer	Aziz	0755-56
		Pakistan


	Underwriters to the Issue

	Ismail Iqbal				Bangalow # C-
				94 KDA
	Securities	Mr. Ahfaz	Nominee	+92 300
	SCHEME 1,	mustafa.ahfaz@gmail.com
	(Private)	Mustafa	Director	8297215
	Main Karsaz
	Limited
				Road Karachi


	Bankers to the Issue

					Regal Chowk,
	United Bank	Mr. Kashif	Branch	+92 42	The Mall	lhr.hbm0049@ubl.com.pk
	Limited (UBL)	Amin	Manager	3735 7968	Branch (0049),

					Lahore

This Offer Document can be downloaded from www.peco.com.pkand https://www.psx.com.pk/

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Offer Document		PAKISTAN ENGINEERING
	COMPANY LIMITED

TO BE PRINTED AND SIGNED ON STAMP PAPER

Undertaking by the Chairman and Chief Financial Officer

We, Mirza Mahmood Ahmad (Chairman) and Mian Anwar Aziz (Chief Financial Officer) of Pakistan Engineering Company Limited certify that :

The Offer Document contains all information with regard to the issuer and the issue, which is material in the context of the issue and nothing has been concealed in this respect;
The information contained in the Offer Document is true and correct to the best of their knowledge and belief;
the opinions and intentions expressed therein are honestly held;
There are no other facts, the omission of which makes the Offer Document as a whole or any part thereof misleading; and
All requirements of the Companies Act, 2017, the Companies (Further Issue of Shares) Regulations, 2020, the Central Depository Company and that of PSX pertaining to the right issue have been fulfilled.

For and on behalf of Pakistan Engineering Company Limited

Mirza Mahmood Ahmad	Mian Anwar Aziz
Chairman	Chief Financial Officer

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Offer Document		PAKISTAN ENGINEERING
	COMPANY LIMITED

TO BE PRINTED AND SIGNED ON STAMP PAPER

Undertaking by the Company Secretary - an officer of the Company authorized by the Board

of directors of the company in this behalf

I, the Company Secretary, as authorized by the Board of Directors of Pakistan Engineering Company Limited hereby confirm that :

All material information as required under the Companies Act, 2017, the Securities Act, 2015, Companies (Further Issue of Shares) Regulations, 2020, the Listing of Companies and Securities Regulations of the Pakistan Stock Exchange limited has been disclosed in this Offer Document and that whatever is stated in offer document and in the supporting documents is true and correct to the best of our knowledge and belief and that nothing has been concealed.
We undertake that all material information, including risks that would enable the investor to make an informed decision, has been disclosed in the offer document.
Right Issue is the discretion of Board of the Issuer and it neither require approval of the Commission nor the Securities Exchange.
The Draft Offer Document was placed on the website of the Securities Exchange and the Issuer on March XX, 2025 (i.e. within 45 days of the date of announcement by the Board.
Comments from Securities Exchange and the SECP were received on March XX, 2025

The Board has ensured that Draft Offer Document is updated in light of the Securities Exchange and SECP comments.
The board has disclosed on PSX's and Company's website, all the comments received along with the explanations as to how they are addressed.
The Final Offer Document was submitted to the Commission and placed on Securities Exchange website on March XX, 2025 along with the book closure dates and relevant right issuance timelines. (i.e. within 20 working days from the date of receipt of comments of PSX and SECP).
the Statutory auditor M/s. Malik Haroon Ahmad & Company Chartered Accountants of the Issuer shall submit half yearly report to the issuer regarding utilization of proceeds in the manner referred to in the Final Offer Document. The issuer will include the Report of the Statutory Auditor, along with its comments thereon, if any, in its Half Yearly and Annual Financial Statements.

For and on behalf of

Pakistan Engineering Company Limited

Mian Anwar Aziz

Company Secretary

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Offer Document		PAKISTAN ENGINEERING
	COMPANY LIMITED

DISCLAIMER:

In line with Companies Act, 2017 and Companies (Further Issue of Shares) Regulations, 2020, this document does not require approval of the Securities Exchange / Pakistan Stock Exchange Limited and the Securities and Exchange Commission of Pakistan (SECP).

The Securities Exchange and the SECP disclaims:
1. Any liability whatsoever for any loss however arising from or in reliance upon this document to any one, arising from any reason, including, but not limited to, inaccuracies, incompleteness and/or mistakes, for decisions and/or actions taken, based on this document.
2. 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.
3. Any responsibility with respect to quality of the issue.

It is clarified that information in this Offer Document should not be construed as advice on any particular matter by the SECP and the Securities Exchange and must not be treated as a substitute for specific advice.

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Offer Document		PAKISTAN ENGINEERING
	COMPANY LIMITED

	GLOSSARY OF TECHNICAL TERMS

ACT	Securities Act, 2015

CDC	Central Depository Company of Pakistan Limited

CDS	Central Depository System

Companies Act	Companies Act, 2017

Company	Pakistan Engineering Corporation Limited

IAS	Investor Account Services

LoR	Letter of Rights

Mn	Million

NICOP	National Identity Card for Overseas Pakistani

PECO	Pakistan Engineering Corporation Limited

PKR or Rs.	Pakistan Rupee(s)

PSX /Securities Exchange	Pakistan Stock Exchange Limited

USD	United States Dollar

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Offer Document		PAKISTAN ENGINEERING
	COMPANY LIMITED

DEFINITIONS

Application Money		The total amount of money payable by existing shareholder 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.
Banker to the Issue
		United Bank Limited has been appointed as the Banker to the Issue, in this
		Right Issue.


Book Closure Dates		The Book Closure shall commence from	[●] 2025	to	[●] 2025	(both days
	inclusive).


Company		Pakistan Engineering Company Limited (the "Company" or "PECO" or the
	"Issuer").


Commission		Securities and Exchange Commission of Pakistan ("SECP").

Issue		Issue of 2,845,123 Right Shares representing 50% of total paid-up capital
	of the Company.


		PKR 100/- per share
Issue Price		The price at which Right Shares of the Company are being offered for

		subscription to the existing shareholders.

Ordinary Shares		Ordinary Shares of Pakistan Engineering Company Limited having face
	value of PKR 10/- each.


		The Companies (Further Issue of Shares) Regulations, 2020
Regulations		https://www.secp.gov.pk/document/the-companies-further-issue-of-

		shares-regulations-2020-updated-march-4-
		2024/?wpdmdl=51188&refresh=663b4dc3873b51715162563

Right Issue		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;
Sponsor		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.

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		PAKISTAN ENGINEERING
Offer Document
		COMPANY LIMITED
Table of Contents
1. SALIENT FEATURES OF THE RIGHT ISSUE	9
1.1.	BRIEF TERMS OF THE RIGHT ISSUE	9
1.2.	PRINCIPAL PURPOSE OF THE ISSUE AND FUNDING ARRANGEMENTS	11
1.3.	FINANCIAL EFFECTS ARISING FROM RIGHT ISSUE	14
1.5.	DETAILS OF UNDERWRITERS	15
1.6.	COMMITMENTS FROM SUBSTANTIAL SHAREHOLDERS/DIRECTORS	15
1.7.	FRACTIONAL SHARES	16
1.8.	IMPORTANT DATES	16
2. SUBSCRIPTION AMOUNT PAYMENT PROCEDURE	17
3. PROFILES OF THE BOARD OF DIRECTORS OF THE COMPANY AND SPONSORS	18
3.1.	PROFILE OF THE BOARD OF DIRECTORS OF THE COMPANY	18
3.2	DIRECTORS DIRECTORSHIP IN OTHER COMPANIES	21
4 DETAILS OF THE ISSUER	22
4.1	FINANCIAL HIGHLIGHTS OF THE ISSUER FOR THE LAST THREE YEARS	22

4.2 FINANCIAL HIGHLIGHTS OF PRECEDING ONE YEAR OF CONSOLIDATED FINANCIAL

	STATEMENTS	22
4.3	DETAILS OF ISSUE OF CAPITAL IN PREVIOUS FIVE YEARS	22

4.4 AVERAGE MARKET PRICE OF THE SHARE OF THE ISSUER DURING THE LAST SIX

		MONTHS	23
	4.5	SHARE CAPITAL AND RELATED MATTERS	23
5.	RISK FACTORS	24
	5.1	RISK ASSOCIATED WITH THE RIGHT ISSUE	24
	5.2	RISK ASSOCIATED WITH ISSUER	24
6.	LEGAL PROCEEDINGS:	27
	6.1	OUTSTANDING LEGAL PROCEEDINGS OF THE COMPANY	27

6.2 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 issuer	31

6.3 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 its
regulations	31
7. SIGNATORIES TO THE OFFER DOCUMENT	32

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Offer Document		PAKISTAN ENGINEERING
	COMPANY LIMITED

1. SALIENT FEATURES OF THE RIGHT ISSUE

1.1. BRIEF TERMS OF THE RIGHT ISSUE

a)		Description of Issue		Issuance of Right Shares to existing shareholders

				The Company shall issue 2,845,123 (Two Million Eight
				Hundred Forty Five Thousand One Hundred Twenty
b)		Size of the proposed Issue		Three) ordinary shares, at a price of PKR 100/- (Pak
		Rupees One Hundred) per share, aggregating to PKR

				284,512,300/- (Pak Rupees Two Hundred Eighty Four
				Million Five Hundred Twelve Thousand Three Hundred).
c)		Face Value of the Share		PKR 10/-

				The Right Issue is being carried out at a premium. The
				premium is justified as it reflects confidence in the
d)		Basis of determination of price of		Company's potential while maintaining affordability for
	the right issue		shareholders, thereby striking a balance between the

				share's market perception and the objective of raising
				necessary funds.
		Proportion of new issue to existing		Approximately 1 right share for every 2 ordinary shares
e)		shares with any condition		held i.e. 50% of the existing paid-up capital of the
		applicable thereto		Company.

		Date of meeting of Board of
f)		Directors (BoD) wherein the right		20th January 2025
		issue was approved
				1. Mr. Mirza Mahmood Ahmad, Chairman
				2. Mr. Muhammad Arif Habib, Non-Executive Director
				3. Mr. Ansar Javed, Non-Executive Director
		Name of directors attending the		4.	Mr. Mr. Tahir Bashir Khan, Non-Executive Director
g)			5.	Mr. Rashid Ali Khan, Non-Executive Director
	Board Meeting
			6. Ms. Saher Mangi, Non-Executive Director

				7. Mr. Mohammad Abbas Mirza, Independent Director
				8. Mr. Arslan Nayyar Sheikh, Independent Director

				The proceeds from the Right Issue will primarily be utilized to
				address the Company's working capital needs, payment of
				utility bills, overdue liabilities of suppliers / banks, and
				restarting operational activities through necessary steps,
		Brief purpose of utilization of right		thereby ensuring the continuity of operations and
h)			compliance with statutory obligations. Additionally, funds will
	issue proceeds
			be allocated for the settlement of overdue trade debts,

				sustaining day-to-day administrative functions, and investing
				the remaining amount in income-generating avenues to
				support ongoing operational expenses.

i)		Purpose of the Right Issue:		The primary purpose of the proposed right issue is to address
		the working capital requirements of the Company, including

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