Pak Suzuki to delist from PSX, cites losses and low share price

KARACHI: Pak Suzuki Motor Company Limited (PSMC) said on Thursday its board of directors had approved a decision to voluntarily delist from the Pakistan Stock Exchange (PSX) and buy back all shares held by minority shareholders.

The company’s board of directors approved the decision, citing losses in operations, low share price, limited trading activity and lack of dividends as reasons for opting for delisting, according to a statement to the PSX.

"The BoD of the company has resolved to delist the company from PSX under rule 5.14 of Voluntary Delisting rules of the Rule Book, for which the company shall submit a formal application to the PSX, the statement said.

"Suzuki Motor Corporation, the majority shareholder of the company, has been authorized to buy back ordinary shares held by the minority shareholders of the company to an extent and at a price to be determined in accordance with the regulations or as may be determined by the PSX or the Securities Exchange Commission of Pakistan for the purposes of voluntary delisting of the company from PSX."

The statement said the operations of Pak Suzuki resulted in losses in 2019, 2020 and 2022. "It has also resulted in a loss up to the 3rd quarter of this year; from 2019, dividends have not been paid to shareholders except for 2021; the current share price of Pak Suzuki is at a historically low level and the number of daily transactions/sales are limited,” it added.

“In view of the foregoing, the sponsor and majority shareholder, Suzuki Motor Corporation, intends to obtain full ownership of Pak Suzuki by purchasing all outstanding shares and securities held by minority shareholders, in order to increase ownership and delist the company from the PSX."

“Considering the unfavorable situation for minority shareholders, it would be beneficial for them to be offered a fair exit,” it said. In accordance with the resolution passed by the board of directors, Suzuki Motor Corporation, the majority shareholder, intends to achieve full ownership of Pak Suzuki Motor Company Limited by acquiring all outstanding shares and securities held by other shareholders. This step aims to consolidate ownership and explore the possibility of delisting the company from the Pakistan Stock Exchange.

Pak Suzuki is an integral part of Suzuki's global strategy, and Pakistan is recognized as one of the most important markets for the company. Suzuki remains fully committed to Pakistan's future potential and the growth prospects within the nation, said the statement.

The next step in this process involves the company submitting a formal application to the PSX for the delisting of its shares. Upon approval of the application, a general meeting of the company's shareholders will be convened and held within 30 days, in agreement with the PSX regarding the minimum purchase price. During this meeting, approval for the delisting of the company's shares from the PSX will be sought through a special resolution.

In a separate statement, PSMC announced a net loss of Rs5.871 billion per share for the nine-month period ending on September 30, 2023, as compared to a loss of Rs2.506 billion during the same period in the previous year. The losses per share for this period were reported at Rs71.34, up from Rs30.45 in the prior year.

However, during the three-month period ending on September 30, 2023, the company posted a net profit of Rs3.805 billion, in contrast to a net loss of Rs2.489 billion during the same quarter in the previous year. Earnings per share for the quarter stood at Rs46.24, compared to a loss per share of Rs30.25 during the corresponding quarter the previous year.