May 05, 2026 (MLN): Yousaf Weaving Mills Limited has received regulatory approval from the Securities and Exchange Commission of Pakistan to issue 36.35 million ordinary shares at par value of Rs10 each, converting an outstanding loan into equity in a move aimed at strengthening its balance sheet.
The approval allows the company to issue shares worth Rs363.53 million to its Director/CEO, Khawaja Muhammad Nadeem, against an interest-free loan previously extended to the company.
The transaction falls under Section 83(1)(b) of the Companies Act, 2017, enabling a further issue of shares other than by way of a right offer, following shareholder approval obtained in an Extraordinary General Meeting held on March 9, 2026.
This debt-to-equity conversion is expected to reduce liabilities while increasing the sponsor’s stake, signaling continued sponsor support amid ongoing financial restructuring.
The SECP has directed the company to complete the issuance in book-entry form within 60 days and notify both the Commission and the exchange within seven days of allotment.
Additionally, the CEO will be subject to a mandatory holding period for the newly issued shares, in line with regulatory requirements.
The regulator also noted that if the transaction triggers provisions under takeover regulations, both the company and the acquirer must ensure full compliance.
This development reflects a broader trend among leveraged firms opting for sponsor-backed equity injections to ease financial pressure and improve capital structure.
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