Oilboy Energy to Redirect Rs 250 Million Rights Issue Funds

Oilboy Energy Limited, a listed company on the Pakistan Stock Exchange (PSX), has announced its decision to redirect Rs. 250 million raised through a recent rights issue, shifting focus from a bio-oil pyrolysis project to strengthening its core trading and logistics operations.

The company’s Board of Directors approved the move and will now seek shareholder approval at its upcoming Annual General Meeting (AGM) to formally revise the use of proceeds from the fundraising initiative

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Board Approves Change in Fund Utilization

In an official notice to the Pakistan Stock Exchange (PSX) issued on Tuesday, Oilboy Energy Limited confirmed that the board has approved a resolution to alter how the Rs. 250 million raised earlier this year will be utilized.

Originally, the funds were allocated for the “Bio-Oil from Pyrolysis – Waste to Energy” project, aimed at establishing an environmentally sustainable biofuel production unit. However, the company has now decided to reprioritize these funds toward business areas with higher commercial returns and immediate operational benefits.

Revised Plan for Rs. 250 Million Utilization

According to the company’s filing, the redirected funds will now be deployed across three key areas:

1️⃣ Expansion of Trading Operations
Oilboy Energy plans to strengthen its core energy trading portfolio, particularly in coal, LPG, and allied fuel products. The management believes this will generate faster revenue growth and better cash flow than the previously planned bio-oil project.

2️⃣ Enhancement of Logistics and Storage Infrastructure
Part of the funding will be used to expand the company’s fuel storage capacity and upgrade logistics facilities, including terminals, warehouses, and transport systems. This will help Oilboy build a robust supply chain network for its fuel and commodity trading business.

3️⃣ Working Capital and Operational Strengthening
A portion of the funds will be allocated to boost working capital, allowing smoother inventory management, imports, and credit operations to meet growing market demand.

Shareholder and Regulatory Approvals Required

The revised utilization plan will be presented to shareholders at the upcoming AGM for approval.
Once approved, the company will also seek clearance from:

• The Securities and Exchange Commission of Pakistan (SECP)
• The Pakistan Stock Exchange (PSX)

The company stated that it remains fully compliant with regulatory disclosure standards and will provide periodic updates on fund utilization following the final approvals.

CEO Authorized to Execute the Plan

Oilboy Energy’s Board of Directors has authorized the Chief Executive Officer (CEO) to take all necessary actions to implement the revised plan.
This includes:

• Filing resolutions with the PSX and SECP.
• Issuing official notifications to shareholders.
• Executing operational changes and procurement agreements.

The CEO has also been empowered to coordinate with auditors, legal advisors, and consultants to ensure that the revised fund utilization aligns with corporate governance standards.

Why Oilboy Shifted Away from the Bio-Oil Project

The original plan — “Bio-Oil from Pyrolysis – Waste to Energy through Fast Pyrolysis” — aimed to produce renewable biofuel from plastic and organic waste.

However, according to industry experts, such projects in Pakistan face long gestation periods, technology import challenges, and high setup costs.
The management’s decision reflects a strategic shift toward more immediate revenue-generating sectors.

By redirecting the funds, Oilboy Energy hopes to enhance profitability, reduce project risk, and respond to current energy market opportunities.

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Oilboy Energy’s Core Business Focus

Oilboy Energy Limited is a diversified energy trading and logistics company involved in:

• Coal imports and distribution
• Liquefied Petroleum Gas (LPG) trading
• Fuel and petroleum product supply
• Transportation and logistics solutions

The company supplies industrial and commercial clients across Pakistan, with operations spread across Karachi, Lahore, and Hub.

This refocusing of resources strengthens its core operational domains, which are already established and profitable.

Energy Market Context in Pakistan

Pakistan’s energy sector continues to face supply shortages, import dependence, and price volatility.
Demand for LPG and coal has surged due to:

• Seasonal gas shortages.
• High electricity demand from industries.
• Rising fuel costs affecting domestic supply chains.

Analysts suggest that by increasing investment in logistics and storage, Oilboy Energy can capitalize on market inefficiencies and improve fuel availability in underserved regions.

Financial Impact and Expected Benefits

Redirecting the funds is expected to have several positive financial impacts:

• Improved cash flow through faster inventory turnover.
• Higher profit margins from trading and supply operations.
• Reduced risk exposure compared to large-scale industrial projects.
• Flexibility to reinvest profits into future green energy initiatives.

The move will also enhance operational efficiency and optimize return on capital, positioning the company for stronger financial performance in FY2026.

Shareholder Confidence and Market Reaction

Investors on the Pakistan Stock Exchange (PSX) have responded cautiously but positively to the announcement.
Market analysts believe the change shows pragmatic management decisions, prioritizing profitability and liquidity in the short term.

One brokerage report noted:

“The revised fund allocation reflects Oilboy Energy’s ability to adapt quickly to market conditions while maintaining compliance and transparency.”

Future Outlook: Balancing Growth and Sustainability

While the bio-oil project has been shelved for now, Oilboy Energy reaffirmed its commitment to renewable and sustainable energy development in the future.
The company stated that it will continue exploring feasibility studies for clean energy initiatives when economic and regulatory conditions become more favorable.

Meanwhile, the focus remains on scaling up operations, diversifying fuel products, and strengthening supply chain networks.

Corporate Governance and Transparency

Oilboy Energy emphasized that all changes in fund utilization will be carried out with full transparency and regulatory oversight.

The company assured shareholders that:

• All financial disclosures will be made public.
• Revised plans will be audited annually.
• Any deviations from the approved resolution will require board approval.

This commitment aims to reinforce investor trust and maintain the company’s strong corporate governance reputation within the PSX-listed energy sector.

Oilboy’s Investment Strategy Moving Forward

In recent years, the company has been strategically transitioning from project-based development to operational expansion.
Its investment focus now centers around:

• Energy trading infrastructure
• Efficient logistics management
• Strategic partnerships with international fuel suppliers

This shift aligns with broader energy market trends, where companies prefer asset-light business models with faster payback periods.

Comparison with Other Sector Players

Oilboy Energy’s decision mirrors similar moves by other Pakistani energy firms, such as:

• Hascol Petroleum, which restructured its trading portfolio to reduce debt.
• Byco Petroleum (Cnergyico), focusing on logistics and retail expansion.
• Pakistan Refinery Limited, redirecting investments toward refining upgrades instead of new projects.

Such strategic adjustments reflect an industry-wide focus on profitability, liquidity, and resilience amid economic uncertainty.

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Conclusion AboutOilboy Energy to Redirect Rs 250 Million Rights Issue Funds:

The Rs. 250 million fund reallocation marks an important turning point for Oilboy Energy Limited.
By shifting focus from a long-term bio-oil project to shorter-cycle trading and logistics operations, the company aims to strengthen its financial foundation, increase operational capacity, and deliver faster shareholder value.

This pragmatic move demonstrates Oilboy Energy’s commitment to sustainability, transparency, and market adaptability — qualities essential for long-term success in Pakistan’s dynamic energy landscape.

With board approval secured and shareholder consent pending, the coming weeks will be crucial for finalizing the transition and defining the company’s next phase of growth.