Bioexyte’s bid to acquire 30pc stake in Mitchell’s falls through

MFFL elects journalist Najam Sethi as its chairman while announcing that it will be exploring other avenues to raise capital

LAHORE: Mitchell’s Fruit Farms Limited (MFFL) on Thursday informed the Pakistan Stock Exchange (PSX) and its shareholders that negotiations with the prefered bidder Bioexyte Foods (Pvt) Limited for the acquisition of 30 per cent shares of the company remained unsuccessful.

After the deal fell through company’s Board of Directors (BoD) decided to explore other avenues to raise capital.

MFFL also elected journalist Najam Sethi as it chairman in place of Syed Muhammad Mohsin on Thursday.

According to an earlier report published in Profit on January 6, Getz Pharma, one of the largest pharmaceutical companies in Pakistan, was all set to acquire MFFL. Sources in both the companies had confirmed it back then.

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Earlier on November 20, 2019, MFFL had announced via a notice to the PSX that it had shortlisted two firms, Waves Singer Pakistan Ltd and Bioexyte Foods, for a strategic sale of shares along with the transfer of management control. 

While Waves Singer has been a renowned company in the country since a number of decades, Bioexyte Foods was only incorporated in July 2019. 

Other than the names of the directors, not much was disclosed about the company. However, Profit was able to confirm that, Bioexyte Foods is a sister company of Getz Pharma, incorporated as an SPV (Special Purpose Vehicle) to acquire MFFL.

MFFL’s past and present

MFFL, established in 1933 by Francis J. Mitchell under the name of Indian Mildura Fruit Farms Limited, is the oldest food company in Pakistan. After independence in 1947, the company’s name was changed to Mitchell’s Fruit Farms Ltd.

Under the brand name ‘Mitchells’, the company gradually expanded its product range to become one of the largest food companies in Pakistan. However in recent times the company’s market share has decreased due to stiff competition from other local players like National Foods and Shan Foods.

In financial terms, MFFL has been in a loss since the last four years and over the last 18 months its directors have had to inject around Rs150 million to keep the company afloat.

As per MFFL’s Annual Report for 2018, the company’s aggregate sales revenue recorded a decline of 14.1 per cent and stood at Rs1.628 billion. In 2018, the company declared a loss of Rs292.61 million compared to a loss of Rs30 million in 2017.

However, the company’s financial performance improved in 2019 as it reported a sales revenue of Rs1.987 billion up 22.08 per cent from the Rs1.628 billion revenue reported in 2018. Moreover, its loss after tax for 2019 also decreased to Rs80 million.

MFFL’s shareholding

Almost 58 per cent of MFFL’s shares are held by its Chief Executive Officer (CEO), directors and their spouses and children. In addition to this, 27 per cent of the shares are held by the general public, approximately 10 per cent shares are held by Modarabas and mutual funds while banks, Development Financial Institutions (DFIs) and Non Banking Financial Institutions (NBFIs) hold a negligible share. Other shareholders of the company mainly include joint-stock companies.

In the last five years, Mitchell’s share price has declined from Rs807.4 to Rs217.40 (as of July 9, 2020).

 

 

 

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Hassan Naqvi
The writer is a staff reporter and can be reached at [email protected]
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