Lucky Cement to implement 5-for-1 stock split to enhance liquidity

Lucky Cement Limited has announced plans to sub-divide its shares, reducing the face value from Rs10 to Rs2 per share in a five-for-one stock split, according to flint by the company at the Pakistan Stock Exchange (PSX) on Friday.  

The proposal, recommended by the company’s Board of Directors in a meeting on February 20, 2025, is subject to shareholder approval in the upcoming Extraordinary General Meeting (EoGM) on March 18, 2025.

According to the company, the sub-division aims to enhance shareholder value and expand investor participation by making the shares more accessible. If approved, the company’s subscribed and paid-up capital, currently comprising 293 million ordinary shares of Rs. 10 each, will be split into 1.465 billion ordinary shares of Rs. 2 each. Eligible shareholders will receive five shares for every one share they hold as of the record date, which will be announced following the EoGM.

In addition to the share sub-division, the company’s Memorandum of Association will be amended to reflect the changes. The Board expressed its gratitude to shareholders for their continued trust and stated that past strategic decisions have contributed significantly to the company’s market value.

According to Arif Habib Limited (AHL), stock splits are a common corporate strategy used to increase market accessibility, enhance liquidity, and attract broader investor participation. 

Additionally, the increased number of shares in circulation will improve market liquidity and make trading more efficient, while maintaining price stability.Unlike bonus shares, which carry tax implications, stock splits are a tax-efficient way for shareholders to benefit from the company’s growth.

The company has scheduled the EoGM for March 18, 2025, at its registered office in Pezu, District Lakki Marwat, Khyber Pakhtunkhwa, with an option for shareholders to participate via video link. 

To facilitate voting, the share transfer book will remain closed from March 11 to March 18, 2025. Share transfers submitted by March 10, 2025, will be eligible for participation in the meeting.

Incorporated on September 18, 1993, Lucky Cement’s principal business is manufacturing and marketing of cement.