A unit of Wilmar International has increased its stake in Pakistan-listed Unity Foods as part of a rights issue exercise carried out by the latter.

Wilmar Pakistan Holdings (WPH) has subscribed for an additional 170.4 million ordinary shares in Unity Foods at 27 Pakistani Rupees (PKR) per share, totalling PKR4.6 billion (about S$35.3 million) in cash.

The subscription was linked to a rights issue exercise announced by Unity Foods on Nov 13, 2021 at PKR27 per rights share at the ratio of around 20.12 rights shares for every 100 shares held by shareholders of Unity Foods.

WPH, which owned 70.2 million shares before the rights issue, is entitled to subscribe for 14.1 million rights shares based on its entitlement for PKR 381.1 million, which it has accepted and paid.

In September 2020, Wilmar announced its wholly-owned subsidiary, WPH was acquiring 70.2 million ordinary shares in Unity Foods. Unity Foods is in the business of manufacturing and processing of edible oils, industrial fats, flour and various feed ingredients for poultry and livestock sector in Pakistan.

Unity Wilmar Agro (UWA), which owns 163.2 million shares in Unity Foods, did not subscribe for any rights shares. Its stake represents about 13.7 per cent in Unity Foods' enlarged share capital. Meanwhile, WPH has a 52 per cent stake in UWA, which gives it an indirect interest of approximately 7.11 per cent in Unity Foods through UWA, after the rights issue.

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In addition, WPH applied to subscribe for up to 185.9 million unsubscribed rights shares and was offered 156.3 million unsubscribed rights shares for subscription, which it has accepted and paid.

Under the applicable laws in Pakistan, Unity Foods' board has the discretion to offer any unsubscribed rights shares to any person for subscription at the expiry of the payment date.

After the rights issue, WPH's direct shareholding in Unity Foods has increased to 240.6 million shares representing 20.15 per cent of Unity Foods' enlarged share capital. Including WPH's indirect interest of about 7.11 per cent, Wilmar's effective interest in Unity Foods is 325.4 million shares, representing around 27.26 per cent of the total shares outstanding in Unity Foods.

Wilmar said: "Payment for the subscription was funded from the company's internal funds. 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 Dec, 31, 2022."

Shares in Wilmar closed at S$4.45 on Friday (Feb 11), unchanged.