Treet : Right Issue (Final Offering Document)

ADVICE FOR INVESTORS

INVESTMENT IN EQUITY SECURITIES AND EQUITY RELATED SECURITIES INVOLVES A CERTAIN DEGREE OF RISKS. THE

INVESTORS ARE REQUIRED TO READ THE RIGHTS SHARE OFFER DOCUMENT (HEREIN REFERRED TO AS 'OFFER DOCUMENT') AND RISK FACTORS CAREFULLY, ASSESS THEIR OWN FINANCIAL CONDITIONS AND RISK-TAKING ABILITY BEFORE MAKING THEIR INVESTMENT DECISIONS IN THIS OFFERING.

RIGHT ENTITLEMENT LETTER IS TRADABLE ON PSX, RISKS AND REWARDS ARISING OUT OF IT SHALL BE SOLE LIABILITY OF

THE INVESTORS.

THIS DOCUMENT IS ISSUED FOR THE PURPOSE OF PROVIDING INFORMATION TO SHAREHOLDERS OF THE COMPANY AND TO THE PUBLIC IN GENERAL IN RELATION TO THE RIGHTS ISSUE OF PKR 2,499,999,996/-, CONSISTING OF 192,307,692 NEW ORDINARY SHARES BY TREET CORPORATION LIMITED. A COPY OF THIS DOCUMENT HAS BEEN REGISTERED WITH THE SECURITIES EXCHANGE.

THIS OFFER DOCUMENT IS VALID TILL 20-Feb-2024

Treet Corporation Limited

Right Share - Offer Document

Date and place of incorporation: January 22, 1977, Pakistan, Incorporation number: 4741, Registered/Corporate

Office: 72 B, Industrial Area, Kot Lakhpat, Lahore, Contact No: : [phone], Website: www.treetcorp.com

• Contact Person: Mr. Muhammad Mohtashim Aftab, Email: [e-mail], Phone: [phone], Email: [e-mail]

Issue Size: The issue consists of 192,307,692 Ordinary Shares of Rs. 10 each at an offer price of PKR 13/- each (i.e. including a premium of PKR 3/- per share). The total amount to be raised through the Right Issue is PKR 2,499,999,996/- which is 107.602% of the existing paid-up capital of Treet Corporation Limited).

Date of Final Offer Letter: 30-Oct-2023

Date of Book Closure: From 14-Nov-2023 to 20-Nov-2023

Subscription Amount Payment Dates: From 24-Nov-2023 to 22-Dec-2023

Trading Dates for Letter of Rights: From 24-Nov-2023 to 15-Dec-2023

Details of the relevant contact persons:

Authorized Officer of the Issuer

S. No.	Name of the	Designation	Contact	Office Address	Email ID
Person	Number
	Muhammad	Group Chief	042-32590701	72-B,Quaid-e-Azam, Industrial Area,	mohtashim.aftab@
1.	Mohtashim
Financial Officer	(Ext: 222)	Kot Lakhpat, Lahore	treetgroup.com
	Aftab
Underwriters
Habib Bank	Syed Khurram	Head ECM &	02133116507	24th floor - HBL Tower, Plot # G4,	Khurram.shahid@hbl.c
Limited	Shahid	Advisory	Block 7 Clifton, Karachi	om

Page 1 of 35

Offer Document |Treet Corporation Limited

AKD	Muhammad	AVP Investment	[phone] Continantal Trade Centre, Block 8,	[e-mail]
Securities
Imran Afzal	Banking	extn 621	Clifton, Karachi	m
Limited
Dawood		Chief Financial		Saima Trade Tower, 17th floor A, I.I	salman@dawoodequ
Equities	Salman Yaqoob	[phone]
Limited		Officer		Chundrigar Road, Karachi,	ities.com
Growth			[phone]Room # 82 83, Second Floor, Pakistan	growthsecurities102
Securities	Kamran	Compliance Officer
Limited				Stock Exchange Building, Karachi	@gmail.com
Mohamma
d Munir
Mohamma		Chief Financial		Room No 601-603, 6th floor، Stock	abdulrazzak@munirkha
d Ahmed	Abdul Razzak	[phone]
Khanani		Officer		Exchange Building, Karachi	nani.com
Securities
Limited
Allied Bank	Tariq Ali	Head Investment
Limited	Banking
MRA	Muhammad			Room # 738-741, 7th Floor, Stock	farhan.mra@gmail.c
Securities	Director	[phone]
Limited	Farhan			Exchange Building, Karachi	om
Adam	Noman Abdul			Room 806-813,8th Floor Main Stock	noman@adamsecurit
Securities	Director	[phone]
Limited	Majeed			Exchange Building, Karachi	ies.com.pk
Banker to the Issue
Habib Bank	Tasleem Yahya	Relationship	[phone]	102/103, Upper Mall, HBL Regional	[e-mail]
Manager
Limited			Headquarters, Lahore	m
The Bank of	Anas Khalid	Relationship	[phone]	The Bank of Punjab, 5th Avenue, 1st	[e-mail].
Punjab	Manager	Floor, 5-T, M.M.Alam Road, Lahore	pk

Website: The offer letter can be downloaded from https://www.treetcorp.com/and https://www.psx.com.pk/

Page 2 of 35

Offer Document |Treet Corporation Limited

DISCLAIMER:

1. In line with Companies Act, 2017 and Companies (Further Issue of Shares) Regulations, 2020, this document does not require approval of the Securities Exchange and the Securities Exchange Commission of Pakistan (SECP).

1. The Securities Exchange and the SECP disclaims:
2. 1. Any liability whatsoever for any loss however arising from or in reliance upon this document to anyone, arising from any reason, including, but not limited to, inaccuracies, incompleteness and/or mistakes, for decisions and/or actions taken, based on this document.
   2. Any responsibility for the financial soundness of the Company and any of its schemes/projects stated herein or for the correctness of any of the statements made or opinions expressed with regards to them by the Company in this Offer document.
   3. Any responsibility w.r.t quality of the issue.

1. It is clarified that information in this Offer document should not be construed as advice on any particular matter by the SECP and the Securities Exchange and must not be treated as a substitute for specific advice.

Page 5 of 35

Offer Document |Treet Corporation Limited

	GLOSSARY OF TECHNICAL TERMS
CDC	Central Depository Company of Pakistan Limited
CDS	Central Depository System
Companies Act	Companies Act, 2017
Commission / SECP	Securities and Exchange Commission of Pakistan
Mn	Million
NICOP	National Identity Card for Overseas Pakistani
PKR or Rs.	Pakistan Rupee(s)
PSX / Exchange	Pakistan Stock Exchange Limited
SECP	Securities and Exchange Commission of Pakistan
TREET / the Company / the	Treet Corporation Limited
Issuer
USD	United States Dollar

Page 6 of 35

Offer Document |Treet Corporation Limited

DEFINITIONS

Any bank with whom an account is opened and maintained by the Issuer for keeping the issue amount.

Banker to the Issue

Habib Bank Limited has been appointed, in this Right Issue, as the Banker to the Issue.

Book Closure Dates

Company

Commission

Issue

Issue Price

Market Price

Ordinary Shares

Regulations

The Book Closure shall commence from 14-Nov-2023 to 20-Nov-2023 (both days inclusive)

Treet Corporation Limited (the "Company" or "TREET" or the "Issuer")

Securities & Exchange Commission of Pakistan ("SECP").

Issue of 192,307,692 Right Shares representing 107.602% of total paid-up capital of the Company.

The price at which Right Shares of the Company are offered to the existing shareholders.

The latest available closing price of the share

Ordinary Shares of Treet Corporation Limited having face value of PKR 10/- each.

The Companies (Further Issue of Capital) Regulations, 2020

https://www.secp.gov.pk/document/the-companies-further-issue-of-capital-regulations-2020-amended-till-september-16- 2022/?wpdmdl=45863&refresh=646da0f53433c1684906229

Right Issue

Sponsor

Shares offered by a company to its members strictly in proportion to the shares already held in respective kinds and classes;

A person who has contributed initial capital in the issuing company or has the right to appoint majority of the directors on the board of the issuing company directly or indirectly;

Page 7 of 35

Offer Document |Treet Corporation Limited

A person who replaces the person referred to above; and

A person or group of persons who has control of the issuing company whether directly or indirectly.

Table of Contents

1	SALIENT FEATURES OF THE RIGHT ISSUE	9
	1.1. BRIEF TERMS OF THE RIGHT ISSUE	9
	1.2. PRINCIPAL PURPOSE OF THE ISSUE AND FUNDING ARRANGEMENTS:	11
	1.3. FINANCIAL EFFECTS ARISING FROM RIGHT ISSUE	13
	1.4. TOTAL EXPENSES TO THE ISSUE	15
	1.5.	DETAILS OF UNDERWRITERS	15
	1.6. COMMITMENTS FROM SUBSTANTIAL SHAREHOLDERS/DIRECTORS:	16
	1.7.	FRACTIONAL SHARES	16
	1.8.	IMPORTANT DATES	16
2	SUBSCRIPTION AMOUNT PAYMENT PROCEDURE	17
3	PROFILES OF THE BOARD OF DIRECTORS OF THE COMPANY AND SPONSORS	17
	3.1. PROFILE OF THE BOARD OF DIRECTORS OF THE COMPANY	18
	3.2. DIRECTORS DIRECTORSHIP IN OTHER COMPANIES	21
4	FINANCIAL DETAILS OF THE ISSUER	22
	4.1. FINANCIAL HIGHLIGHTS OF THE ISSUER FOR THE LAST THREE YEARS	22
	4.2.	FINANCIAL HIGHLIGHTS OF PRECEDING ONE YEAR OF CONSOLIDATED FINANCIAL
	STATEMENTS	23
	4.3. DETAILS OF ISSUE OF CAPITAL IN PREVIOUS FIVE YEARS	23
	4.4.	AVERAGE MARKET PRICE OF THE SHARE OF THE ISSUER DURING THE LAST SIX MONTHS
	…………………………………………………………………………………………………………………………………………………24
	4.5. SHARE CAPITAL AND RELATED MATTERS	24
5	RISK FACTORS	25
	5.1. RISK ASSOCIATED WITH THE RIGHT ISSUE	25
	5.2. RISK ASSOCIATED WITH ISSUER	25
6	LEGAL PROCEEDINGS:	28
	6.1. OUTSTANDING LEGAL PROCEEDINGS OF THE COMPANY	28

6.2. ACTION TAKEN BY THE SECURITIES EXCHANGE AGAINST THE ISSUER OR ASSOCIATED LISTED COMPANIES OF THE ISSUER DURING THE LAST THREE YEARS DUE TO NONCOMPLIANCE

OF THE ITS REGULATIONS

34

6.3. ANY OUTSTANDING LEGAL PROCEEDING OTHER THAN THE NORMAL COURSE OF BUSINESS INVOLVING THE ISSUER, ITS SPONSORS, SUBSTANTIAL SHAREHOLDERS, DIRECTORS

Page 8 of 35

Offer Document |Treet Corporation Limited
AND ASSOCIATED COMPANIES, OVER WHICH THE ISSUER HAS CONTROL, THAT COULD HAVE
MATERIAL IMPACT ON THE ISSUE	34
7 SIGNATORIES TO THE OFFER DOCUMENT	34

• SALIENT FEATURES OF THE RIGHT ISSUE

1.1. BRIEF TERMS OF THE RIGHT ISSUE

a)	Description of Issue:	Issuance of Right Shares to existing shareholders
		The Company shall issue 192,307,692 (One Hundred
		Ninety-Two Million Three Hundred Seven Thousand Six
		Hundred Ninety-Two) Ordinary shares, at a price of PKR
b)	Size of the proposed Issue:	13/- (Pak Rupees Thirteen) per share, aggregating to
		PKR 2,499,999,996/- (Pak Rupees Two Billion Four
		Hundred Ninety-Nine Million Nine Hundred Ninety-
		Nine Thousand Nine Hundred Ninety-Six).
c)	Face Value of the Share:	PKR 10/-
		The Right Issue is being carried out at a premium.
		Considering the current market price of the Company,
		the premium charged over the par value is justified and
d)	Basis of determination of price of the	is in	line with market practice, in fact the same
Right Issue:	constitutes a 27.21% discount on the last 3 months
		(from the date of the decision of the Board to carry out
		the Issue) average trading share price1.
	Proportion of new Issue to existing	107.602 right shares for every 100 Ordinary shares held
e)	shares with any condition applicable	i.e., 107.602% of the existing paid-up capital of the
	thereto:	Company
	Date of meeting of Board of Directors
f)	(BoD) wherein the Right Issue was	Aug 03, 2023
	approved:
		1.	Syed Shahid Ali
		2.	Syed Sheharyar Ali
		3.	Imran Azim
g)	Name of directors attending the Board	4.	Dr. Salman Faridi
Meeting:	5.	Dr. Haroon Latif Khan
		6.	Munir Karim Bana
		7.	Sidra Fatima
		8.	Ahmad Shahid Hussain

• Last three months' average share price is PKR 17.11 per share (From July 27, 2023 to October 27, 2023)
  Page 9 of 35

Offer Document |Treet Corporation Limited

1. Brief purpose of utilization of Right Issue proceeds

As part of the long-term business strategy, the Company is considering to undertake capacity enhancement of the existing product line, and also expanding its product portfolio by addition of new products. In order to execute the proposed enhancements and CAPEX in near future, the Company is undertaking overall capital alignment of the balance sheet by reducing its existing short-term obligations to an optimal level.

Purpose of the Right Issue

Details of the main objects for raising funds through present Right Issue:

1. 1. Total funds required for the
2. project
3. 1. Percentage of funds financed through the Right Issue
   2. Percentage of funds financed from other sources
   3. Time of completion of project
   4. Impact on production capacity

Given below is the break-up of utilization of Right Share proceeds of PKR 2,499,999,996

Repayment of Debt/Realignment of Capital Structure: PKR 1,899,999,996*

Capacity Enhancements and CAPEX of existing and new product line:

• CAPEX of existing Product Line: PKR 370,000,000*
• New Product line: PKR 230,000,000*

1. Total Funds required for the Projects:
   882,120,243
2. Percentage of Funds financed through Right Issue:
3. 1. Capacity enhancement: 57% (PKR 370,000,000)
   2. New Product Development: 100% (PKR 230,000,000)
4. Percentage of funds required financed from other sources: Internal Cash generation
5. 1. Capacity enhancement: 43% (PKR 282,130,243)
   2. New Product Development: 0%
6. Time of completion of project:

Realignment of the balance sheet is expected within a period of 3-4 working days from the date of receipt of Right Issue proceeds. However, with respect to the New Product Development of Twin Blade Rubberize Handle, three Letter of Credit(s) have been established. The enhancements and CAPEX may take up to 3 to 4 quarters from the date of receipt of Rights Issue Proceeds. Moreover, it may take up to 6 to 8 months from the date of receipt of the machinery and equipment to start the manufacturing of existing and new product lines.

1. Impact on production capacity:
   Given below is the breakup of capacity enhancement:

Pre-	Post-	Increase
Issue	Issue
(Units in
(Units in	(Units in
Millions)
Millions)	Millions)

Page 10 of 35