Bestway Cement Limited shareholders have rejected a rights share offer from Bestway Automotive (Private) Limited (BAL), potentially ending the listed company’s control over its year-old automobile subsidiary.
The decision was taken at the shareholders’ meeting on August 31, 2026, and disclosed to the Pakistan Stock Exchange the following day.
Rights Refusal Puts BAL Control In Doubt
Following the refusal, BAL may offer the rights shares to another party, including a Bestway Group company, subject to applicable laws.
If the shares are taken up by another party, BAL would no longer remain a subsidiary of Bestway Cement.
The development comes less than a year after Bestway Cement approved a Rs10 billion investment plan for its automobile venture, comprising up to Rs4 billion in equity and Rs6 billion through a shareholder loan.
Questions Remain Over The Auto Investment
BAL was incorporated in September 2025 to enter Pakistan’s automotive market. It later signed an asset purchase agreement for Al-Haj Automotive, which received clearance from the Competition Commission in early 2026.
However, BAL had yet to begin commercial operations by mid-2026.
The latest disclosure does not provide important details, including the number and price of rights shares, the total amount involved or the identity of a potential new subscriber.
Could The Auto Business Move To The Group?
If another Bestway Group company subscribes to the rights issue, the automobile business could continue while moving outside Bestway Cement’s listed structure.
This raises questions for minority shareholders, who could lose exposure to any future gains from the diversification while the wider group retains an interest in the business.
Bestway Cement Faces A Capital Allocation Decision
Bestway Cement remains a major earnings contributor. Its consolidated FY26 profit increased 7% to around Rs25.57 billion, while the company also announced a Rs10 cash dividend.
Shareholders’ decision could therefore be viewed as a move to preserve capital and focus on the core cement business, particularly given the capital requirements and risks associated with Pakistan’s automotive sector.
However, investors will need more information before judging the decision.
Investors Need More Clarity
The market will likely want details on the rights issue, the company’s remaining stake, loans provided to BAL and whether another Bestway Group entity plans to subscribe.
Until those details emerge, the decision represents more than a routine rights issue. It could determine whether Bestway Cement’s auto diversification remains part of the listed company or shifts to the wider group.