Suzuki eyes Rs406/share buyout

KARACHI: Suzuki Motor Corporation, the majority shareholder in Pak Suzuki Motor Company (PSMC), has offered to buy out the minority shareholders at a minimum price of Rs406 per share and delist the company from the Pakistan Stock Exchange (PSX), PSMC said on Monday.

The Japanese automaker, which owns 73.09 percent of PSMC, the largest car manufacturer in Pakistan, has proposed to purchase 22.14576 million ordinary shares, representing 26.91 percent of the paid-up capital, held by the minority shareholders, PSMC said in a notice to the PSX.

The proposed minimum purchase price has been determined as per the requirements of the regulation, PSMC said, adding that it has appointed Arif Habib Limited as the purchase agent.

PSMC said that the sponsor and majority shareholder intends to obtain full ownership of the company by purchasing all outstanding shares and securities held by minority shareholders, to increase ownership and to consider the delisting of the company from PSX.

The company said that the operations of Pak Suzuki resulted in losses in 2019, 2020 and 2022. It has also resulted in a loss up to the third quarter of this financial year i.e. 2023. From 2019, dividends have not been paid to shareholders except for 2021, it said.

"Therefore, the sponsors of the company believe that it is their responsibility to offer the minority shareholders a fair opportunity to exit so that they can make the best use of their investment in other profitable avenues," PSMC said.

PSMC, on October 12, had said it will review and consider the majority shareholder's intent to purchase all outstanding shares of the company and delist from the PSX. A week later on October 19, the Board of Directors of PSMC decided to purchase all outstanding shares of the company and delist from the PSX.