Pak Suzuki Motor Company to Delist from Pakistan Stock Exchange
The Board of Directors (BoD) of Pak Suzuki Motor Company (PSMC) announced its decision to acquire all outstanding shares of the company and delist from the Pakistan Stock Exchange (PSX), as disclosed in a notice issued to the bourse on Thursday.
The decision, made during a BoD meeting of the Suzuki motors, follows the PSX Rule Book’s section 5.14, Voluntary Delisting rules. The company will formally apply to the PSX for approval under these rules, while the majority shareholder gains authorization to repurchase ordinary shares from minority shareholders as per regulatory guidelines.
Pak Suzuki’s Delisting Decision Driven by Challenges, Losses, and Low Share Price
Pak Suzuki Motor Company (PSMC) pointed to financial losses from 2019 through 2022, absent dividends since 2019, a historically low share price, and limited daily transactions as factors leading to its delisting choice.
The company, majority-owned by Suzuki Motor Corporation, intends to obtain complete ownership by acquiring outstanding shares from minority stakeholders and delisting from the PSX.
PSMC, however, affirmed Pakistan’s significance in Suzuki’s global strategy. The announcement boosted the share price, which had been under pressure, reaching the upper limit. PSMC had recently signaled its intent to purchase outstanding shares and delist.
High compliance costs led to Pak Suzuki Motor Company’s delisting choice, says Fahad Rauf, Head of Research at Ismail Iqbal Securities Limited. The company perceives its shares as undervalued and opts for a buyback. PSMC reports Rs9.68 billion losses in H1 FY2022-23, citing sales drop and higher finance costs. Frequent plant shutdowns occurred due to auto sector challenges: high energy costs, political instability, and import credit struggles. Other automakers, like Indus Motor Company and Honda Atlas, also announced temporary shutdowns.
