The Board of Directors (BoD) of Pak Suzuki Motor Company Limited (PSMC) will review and consider the majority shareholder’s intent to purchase all outstanding shares of PSMC held by other shareholders and de-listing under Rule 5.14.1 of the listing regulations.
As per a notice issued by the company to the Pakistan Stock Exchange (PSX), the decision taken by the board will be communicated right after the board meeting which will be held on Thursday, October 19, 2023. Moreover, the BoD will review and consider the quarterly financial statements of the company for the third quarter ended September 30, 2023, and for declaration of any entitlement if any.
The company has declared the “Closed period” from October 12, 2023, to October 19, 2023, both days inclusive, the notice further added. Accordingly, no Director, CEO, or Executive will, directly / indirectly, deal in the shares of the company in any manner during the closed period.
In recent months, a number of companies from different sectors have announced share buybacks citing low valuations of scrips. To note, on September 18, the Pakistan Stock Exchange Limited carried out a Re-Composition exercise of KSE-100 index companies for the review period from March 2023 to August 2023, and PSMC was one of the four companies to leave the index.
The PSX’s KSE-100 Index has been under pressure for years as a number of factors have discouraged investment in Pakistan’s stocks. Market capitalization, which was once close to $100 billion, has retreated to under $26 billion now.
Delisting from PSX means there will be no more obligations to declare any financial report to the public. Furthermore, since the company has been facing a severe decline in sales for several months that has dented its profits badly, Pak Suzuki would probably be looking to fire off workers in the near future as after delisting it will be less impacted by labor laws and labor courts. After Pak Suzuki other companies may also follow suit which is not a good sign for the industry.
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