Dost Steels Limited’s (PSX: DSL) assets are now worth 4x more (Rs. 10 billion) than the current book value of Rs. 2.5 billion.
DSL during the passing quarter finalized a major debt settlement with its lender banks, announced a Rs. 4.44 billion rights issue, and disclosed significant upside in asset valuation, according to the company’s latest stock filing today.
The company said it successfully executed a settlement agreement with its syndicate of lender banks against outstanding liabilities of Rs. 2.08 billion during the quarter. As part of the settlement, Dost Steels made an initial down payment of Rs. 50 million at the time of signing, followed by the first installment of Rs. 127 million during the quarter under review.
The settlement has been formally endorsed by the Sindh High Court through a consent decree, providing a legally binding framework for restructuring the company’s liabilities and supporting its revival plan.
Separately, the company announced a 100 percent rights share issue during the outgoing quarter amounting to Rs. 4.44 billion at par value of Rs. 10 per share. According to the filing, the proceeds will be utilized to support backward integration, including the establishment of a melting plant. Management expects the planned expansion to improve operational efficiency and strengthen long-term profitability.
A report issued by an independent and recognized valuer has assessed Dost Steels’ assets at Rs. 10 billion, compared to a current book value of Rs. 2.5 billion.
Subject to approval by the board of directors, the resulting revaluation surplus could translate into a potential break-up value of around Rs. 15 per share, versus Rs. 0.43 per share currently reflected in the financial statements.
