Pak Suzuki Motor Company has agreed to increase the price of its shares under a buyback plan to Rs609 per share to qualify for delisting from the Pakistan Stock Exchange (PSX).
Earlier, the Japanese car manufacturing firm had offered to buy back its shares from the general public at Rs406 per share in the first week of December 2023.
However, the voluntary delisting committee of the PSX a couple of days ago determined the buyback price at Rs609 per share, which was almost 50% higher compared to the company’s proposed price.
In a notification sent to the PSX on Thursday, Pak Suzuki Motor said “we, Suzuki Motor Corporation (the Japanese owner) as the majority shareholder and sponsor of Pak Suzuki Motor Company Limited, hereby convey the acceptance…to purchase the ordinary shares of Pak Suzuki at a buyback price of Rs609/share, subject to the purchase of at least 13.92 million ordinary shares (62.84% of the total outstanding ordinary shares of 22.15 million) with shareholders other than majority shareholders, to qualify for delisting as approved by the voluntary delisting committee of the exchange.”
The company’s share price stood near Rs206 per share a day before it announced the decision to delist in October 2023. Later, the stock spiked and reached Rs918 in the current month over optimism that the delisting price would be significantly high.
On Thursday, Pak Suzuki Motor’s share price fell by the maximum limit of 7.5% for a day, or Rs49.71, closing at Rs613.06 with 998,402 shares changing hands at the PSX.
Earlier, the company applied for delisting, saying it found no reason to stay at the bourse after paying no dividends to shareholders and remaining in losses for a couple of years.
The company clarified the other day that its decision to exit the bourse did not mean it would wind down its car manufacturing and marketing business in Pakistan as the country remained an important market for the automaker.
Pak Suzuki Motor reported losses in 2019, 2020 and 2022. It also posted losses up to the third quarter of the current fiscal year. From 2019, dividends had not been paid to shareholders expect for 2021.
Therefore, sponsors of the company believe that it is their responsibility to offer minority shareholders a fair opportunity to pull out so that they can make the best use of their investment in other profitable avenues, it said.
J&P to buy shares at Rs160
In another notification, Johnson & Phillips (Pakistan) showed its consent to pay Rs160 per share for buying back its stake from ordinary shareholders and delist from the bourse.
Its notification said “sponsors of the company be and are hereby authorised to purchase 545,983 ordinary shares of the company at a buyback price of Rs160/share, as determined and approved by the voluntary delisting committee of the exchange on December 18, 2023, from the shareholders other than the sponsors for the purpose of delisting of the company from the Pakistan Stock Exchange.”
The company will be delisted from the exchange upon completion of all regulatory requirements. Muhammad Anis Mianoor, CEO of the company, has been authorised to do all work.
Published in The Express Tribune, January 19th, 2024.