KARACHI: Lucky Cement Limited, a holder of Lucky Motor Corporation, has said that LMC possesses the exclusive right to the production of KIA cars and SUVs in Pakistan.
In an announcement to the PSX on Thursday, the company clarified that LMC held an exclusive license for manufacturing, assembling, marketing, distribution and sale of KIA cars and SUVs in Pakistan.
It provided this information with reference to recent inquiries by its shareholders and the general public regarding its subsidiary LMC.
It also shared a letter by KIA Corporation, Republic of Korea.
SooHang Chang, President KIA Middle East and Africa in a letter to LMC President Automotive Muhammad Faisal said, “We would like to clarify that Lucky Motor Corporation (LMC) is the exclusive licensee of KIA to manufacture, assemble, market, distribute and sell KIA cars and SUVs in Pakistan according to general agreement for technical collaboration and KD supply signed between both the parties.”
The letter further clarified that a contract recently signed by and between KIA’s “Special Vehicle Division” and Dewan Farooque Motors Limited (DFML) was limited only to special purpose commercial vehicles including PU (Bongo). It said that DFML was not and shall not in future be allowed to produce any other KIA cars and SUVs in Pakistan as long as KIA and LMC maintain CKD business in Pakistan.
It should be mentioned that DFML announced on Monday that it has come into an agreement with KIA Corporation, Korea for the production of vehicles.
In material information provided to the PSX, Dewan Motors secretary said, “We inform you that Dewan Farooque Motors Limited has entered into technology license agreement (TLA) with KIA Corporation, Republic of Korea, for the production/assembly of vehicles.”
Despite the fact that LMC produced KIA cars and SUVs in Pakistan, Dewan Motors did not clear which vehicles it would produce. The statement confused the investors and general public as previously it produced Sportage and other KIA vehicles.
The News had reported that Dewan Motors might produce KIA’s commercial vehicles only.
Recently, the share prices of Dewan Motors have increased at the PSX multiple times despite it being in the defaulter segment. On Monday when it announced the deal with KIA corporation, a total of 17.75 million shares of the company were traded that increased by 25 paisa/share to Rs11.41/share. The share price was around Rs4 a couple of months back.
After clarification of Lucky Group, the share price of Dewan Motors fell by 76 paisa to Rs9.74/share with a trade of 8.109 million shares.
In its quarterly earnings, the company declared a loss of Rs105.083 million during the quarter that ended September 30, 2022, against the losses of Rs63.813 million during the same quarter last year.
Dewan Motors also came under the radar of PSX for unusual movement in price and in volumes. On November 4, PSX issued a letter to Dewan Motors asking how its share prices had increased largely prior to its announcement of the deal with the KIA Corporation.
In its response to the PSX letter, the company secretary of Dewan Motors replied on Tuesday, “We hereby confirm that we are unaware of the real/actual reason for the fluctuations in the security prices of the company. However, the company’s management has been trying for a long time for the resumption of its operations.”
In this regard, he said, “Company has been continuously putting efforts to approach, negotiate and deliberate with various parties for the revival of its operations. This fact has consecutively been mentioned in the periodic financial statements of the company as well.”