Big Bird has announced a plan to convert Rs. 1.5 billion in outstanding director loans into equity. The proposal is subject to shareholder approval, the company stated in a notice to the Pakistan Stock Exchange (PSX).
The conversion price is proposed at Rs. 49.42 per share, based on the average market price over the last three months. According to the Chief Executive Officer, the move aims to strengthen Big Bird’s capital base and improve the company’s financial stability.
The plan involves issuing new shares to directors in exchange for their outstanding loans. However, it is not structured as a traditional rights issue. Instead, the conversion would directly replace debt with equity, enhancing the company’s balance sheet.
During a board meeting, it was noted that most directors present were considered “interested directors” under the Companies Act, 2017, and could not participate in the decision. After discussion, the board unanimously resolved to place the proposal before shareholders at a general meeting.
Shareholders will be asked to approve the loan-to-equity swap in line with legal requirements before the conversion takes place. The company emphasized transparency and adherence to corporate governance standards in this process.
Big Bird’s move reflects a broader trend in corporate finance, where companies convert director loans into equity to reduce debt obligations while aligning management interests with shareholders.
Once approved, the conversion is expected to enhance Big Bird’s financial health, giving the company a stronger capital foundation for future growth. The proposal marks a significant step in the company’s ongoing efforts to restructure its finances and ensure long-term stability.
The company plans to finalize the swap after receiving shareholder consent, signaling confidence in both its current management team and future business prospects.
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