Singer Pakistan to acquire appliance makers

KARACHI: Singer Pakistan Limited on Monday announced to acquire home appliance manufacturers Cool Industries and Link Well in shares swap arrangements.
“Cool Industries (Private) Limited (CIL) will be merged with and into Singer, against which 93.975 million shares will be issued to the shareholders of CIL based on a swap ratio of approximately 1.79 shares of Singer for every one share of Cool Industries (Private) Limited,” a bourse filing said.
Moreover, Link Well (Private) Limited (LWL), famous for brand name Waves, will be merged with and into Singer against which 2.475 million shares will be issued to the shareholders of LWL based on a swap ratio of approximately 0.33 shares of Singer for every one share of Link Well (Private) Limited.
Link Well provides products and services for gas appliances and home appliances.
Singer Pakistan Limited will be renamed into Waves Singer Pakistan Limited as a result of merger.
Haroon Khan, chief executive officer at Singer Pakistan said the business environment remained challenging in the consumer appliances sector due to severe competition and entry of new retailers with rise in consumer financing.
“However, the management remains committed to continue adding value to the business by continually investing, innovating and improving operations,” Khan said in the company’s January-June financial report.
But, the market did not positively react to the development as Singer shed three percent to close at Rs39.40/share.
Singer Pakistan also announced to demerge its retail business into its wholly-owned subsidiary, Electronics Marketing Company (Private) Limited, which will issue 24.8 million shares in favour of Singer.
“The scheme of arrangement is subject to obtaining all necessary shareholders’, creditors’ and regulatory approvals, and the sanction of the scheme by the High Court of Sindh along with fulfillment of related legal formalities,” the notice to Pakistan Stock Exchange said.
Last year, Singer Pakistan’s Amsterdam-based parent also offloaded its holding in the local operation.
The company said the divestment was a policy decision of Singer Asia Limited, indicating its departure was not Pakistan-specific.
The board has already approved sale of the company’s factory land and buildings
and to simultaneously enter into a lease agreement with the prospective purchaser of the property for the continuation of uninterrupted use of the required area for business and manufacturing activities of the company.
“Proceeds are expected to be substantially used for the settlement and the reduction of the company’s borrowings enabling the company to reduce its borrowing cost,” the company said in the earnings report.