Searle Pakistan to Buy Searle IV Solutions and Stellar Ventures for Rs. 7.25 Billion

The Board of Directors (BoD) of Searle Company Limited (PSX: SEARL) has given its approval for acquiring Searle IV Solutions (Private) Limited and Stellar Ventures (Private) Limited (SVPL) for an aggregate cost of Rs. 7.25 billion, the company’s told the Pakistan Stock Exchange on Thursday.

SEARL has decided to acquire 100 percent of the issued and paid-up share capital of Searle IV Solutions (Private) Limited and SVPL for an aggregate price of Rs. 3,500,000,000 (Rs. 3.5 billion) and Rs. 3,750,407,053 (Rs. 3.75 billion), respectively, subject to obtaining necessary corporate, regulatory and stakeholder approvals.

Additionally, the Board resolved to authorize the persons to take all necessary steps with respect to the said transaction, including calling an extraordinary general meeting of the shareholders of the Company for the purpose of obtaining the approval of the shareholders for such acquisition, the filing added.

Furthermore, at today’s Board Meeting, the BoD decided to increase the paid-up share capital of the Company by issuing additional 121,428,571 ordinary shares, having a face value of Rs. 10 each as Right Shares, to be offered to the members of the Company in the proportion of approximately 31.1302746 Right Shares for every 100 ordinary shares held i.e. approximately 31.1302746 percent, at a price of Rs. 35 per share (inclusive of a premium of Rs. 25 per Right Share).

The increase would translate into Rs. 5,114,944,240 ordinary paid-up share capital from the current capital of Rs. 3,900,658,530.

The purpose of the Right Issue is to expand the Company’s portfolio by enabling it to invest in Searle IV Solutions (Private) Limited as well as to reduce current debt levels and favorably improve its capital structure by reducing leverage in an increasing interest rate environment, and, consequentially, improve the Company’s profitability and financial ratios which is expected to increase shareholder return.

The filing mentioned that the dates of closure of the Share Transfer Books of the Company, to determine the entitlement of Right Shares, will be communicated in due course after finalization of the offer letter/document in accordance with the provisions of the Companies (Further Issue of Shares) Regulations, 2020.

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