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HRPL has approved a $500,000 interest-free loan from its sponsor shareholder to strengthen liquidity and support the company’s working capital requirements.
Habib Rice Products Limited (HRPL) has approved an unsecured, interest-free loan of up to $500,000 from its sponsor shareholder, Mr. Gaffar A. Habib, to strengthen the company’s liquidity position and support its working capital requirements.
The decision was approved by the company’s Board of Directors during a meeting held on July 14, 2026, according to a notice submitted to the Pakistan Stock Exchange (PSX).
Under the approved arrangement, the financing will be provided by the company’s sponsor shareholder as an unsecured loan with no interest charges. The loan amount will be disbursed in Pakistani rupees based on the prevailing US dollar exchange rate at the time of disbursement.
HRPL stated that the facility has been arranged to enhance the company’s liquidity and ensure sufficient working capital for its operational requirements.
The company further disclosed that the loan will be repayable upon the lender’s request, subject to the mutual consent of both parties. Any repayment will also depend on the company’s assessment of its available cash flows at the time, ensuring that repayments are made only when financially feasible.
According to the terms approved by the board, the repayment amount will be calculated in Pakistani rupees using the prevailing US dollar to Pakistani rupee exchange rate on the date of repayment. This mechanism aligns both the disbursement and repayment values with prevailing currency exchange rates.
The financing does not involve any interest expense or security arrangements, providing HRPL with access to additional liquidity without increasing borrowing costs or requiring the company to pledge assets.
Sponsor financing is commonly used by listed companies to meet short-term funding requirements, particularly when businesses seek to strengthen cash flow or support operational activities while maintaining financial flexibility.
HRPL said the facility is expected to improve its liquidity position and provide additional resources to meet ongoing working capital needs.
The board’s approval reflects the company’s efforts to reinforce its financial position through shareholder support while ensuring access to funding for operational requirements under mutually agreed terms.
