Wilmar Int’l invests Rs701mn in Pakistan’s Unity Foods, increases shareholding to 23.47pc

LAHORE: Wilmar Pakistan Holdings (WPH) Private Limited, a direct wholly-owned subsidiary of Wilmar International, has subscribed for some 70.2 million ordinary shares in Unity Foods Limited (UFL) for a total of Rs701.55 million in cash, increasing Wilmar International’s shareholding in UFL to approximately 23.47 per cent.

The subscription by Wilmar Pakistan was made in connection with a rights issue exercise undertaken by Unity Foods at the price of Rs10 per rights share at the ratio of 82.71 rights shares for every 100 shares held by the shareholders of Unity Foods (“UFL Rights Issue”). 

“Under the applicable laws in Pakistan, if there were unsubscribed rights shares at the expiry of the subscription/payment date, the Board of Directors of Unity Foods has the discretion to offer such unsubscribed rights shares to any person for subscription,” the announcement said. 

Pursuant to the above, Wilmar Pakistan Holdings had applied to subscribe for up to 213,269,339 rights shares in the UFL Rights Issue and was offered 70,155,000 rights shares for subscription, which it has accepted and paid. 

Payment for the subscription by WPH was funded from the Wilmar International’s internal funds, the company said, adding that the subscription is not expected to have a material impact on the consolidated net tangible assets and earnings per share of the Wilmar Group for the current financial year ending 31 December 2020. 

Earlier in July, Unity Wilmar Agro (UWA), an indirect 52%-owned subsidiary of Wilmar International, had increased its total shareholding in the Unity Foods to 163.2 million ordinary shares from 59.9 million ordinary shares, for cash consideration of Rs1.03 billion to increase its ownership in Unity Foods by 18.98 per cent to around 30 per cent.

The statement by the company further clarified that UWA did not subscribe for any rights shares in the UFL Rights Issue exercise, and Unity Wilmar Agro continues to own 163,165,877 ordinary shares in Unity Foods representing approximately 16.41% shareholding interest in Unity Foods’ enlarged share capital after the UFL Rights Issue. 

Previously, the UWA held 11.01 per cent stake in Unity Foods which it had acquired in May 2019 equivalent to 59,905,187 shares of the company.

Accordingly, Wilmar’s resultant deemed shareholding interest in Unity Foods, held via UWA and WPH, is 233,320,877 ordinary shares representing approximately 23.47 per cent shareholding interest in Unity Foods. 

Unity Foods Limited entered the edible oil industry three years ago. It specialises in edible oil, speciality fats and animal feeds. The company had a stellar financial performance in 2019 with revenue growing 407 per cent to Rs14 billion, from Rs2.8 billion in the fiscal year 2018.

When the company entered the edible oil industry, it had a refining capacity of 54,000 metric tons per annum; it now has a refining capacity to 234,000 ton per year.

In February 2019, Unity Foods had raised Rs3.75 billion from the equity markets to fund expansion. Similarly, the company had raised Rs1.65 billion in June 2017 from a rights share issue to finance the purchase of a solvent extraction plant, an oil refinery and other ancillary assets and purchase of land and office building.