Maymar Holdings to buy Haji Mohammad Ismail Mills in bid to become publicly listed

Real estate developer plans to buy the practically defunct textile mill turned consumer goods distributor to achieve public listing without the underwriting process

Pakistani company names often fall on two extreme ends of the spectrum. Either they are completely over the top, usually some odd latin word in an attempt to sound fancy, or simply named after the founder, in the ultimate narcissistic (but good for visibility) move. 

Haji Mohammad Ismail Mills is in the latter camp. Certainly, it is the only publicly listed company that comes to mind that features the honorific Haji, as far as Profit can tell, but this extra dash of piousness has not led to brand visibility. In fact, one can confidently assess by the lack of analyst recognition, that no one has any idea that this company existed. 

But exist it does, and it has been listed on the Pakistan Stock Exchange (PSX) for quite some time now. It was incorporated as a private limited company in February 1980 and subsequently converted into a public limited company in October 1987. 

Originally, the principal business of the company was the manufacture and sale of yarn, and power generation. But this did not go as planned. The company’s multiple annual reports paint a deteriorating picture: as one noted, the textile industry in the 2000s suffered from inconsistent monetary policies, poor economic conditions and a poor law and order citation. 

This led to the company suspending its yarn manufacturing unit in 2007. This still did not solve the problem: between 2007 and 2012, the company made a loss every single year except in 2010. So Ismail Mills decided to sell its by now extremely ‘old and obsolete’ machinery in 2012, and pay off liabilities. 

Unfortunately,  the 2010s were not kind to the company either. The 2016 annual report lists a litany of problems: inflation, load shedding, cost of production, and lack of technology. So the company’s management decided to switch into another field altogether: distributing fast moving consumer goods. 

“The company has taken on a mission to set up fast moving consumer goods channel for public awareness, improve its profitability and meet its commitments with customers, creditors, employees and give a fair return to its shareholders while complying with the best practices of Corporate Governance,” the company website reads (it is the only nugget of information on the website, incidentally).

According to annual reports, the company signed an agreement with a meat and food chain company to distribute its products, and was in talks to sell frozen foods. It also called up a construction company for the supply of cement for its projects. 

But the Securities and Exchange Commission, Pakistan (SECP) thought very differently. Not impressed with the management’s delay in actually implementing its ambitious new FMCG plan, it ordered the company’s winding up in April 2017. The company appealed, and the matter is still pending in the High Court of Sindh, in 2020. In the meantime, the company continued to make losses between 2018 and 2020, with the most recent loss at Rs22 million. The company now sits on the PSX’s defaulter’s list. 

All in all, a not very impressive showing, though it has yet to deter the company. According to a notice issued to the PSX on November 19, the company is in talks with Maymar Holdings to explore the feasibility of a potential merger.

Unlike Haji Mohammad Ismail Mills, Maymar Holdings has no problem with brand visibility. That is because the Maymar in the name comes from Gulshan-e-Maymar, a neighbourhood north of Bufferzone and New Karachi Town in the city of Karachi, created in the 1980s. No one in Karachi calls it by the full name: it is referred to as Maymar, as ‘Gulshan’ refers to what is now formally known as Gulshan-e-Iqbal (a neighbourhood somewhat more to the south). 

The company’s origins were in 1966, when founders Hafiz Sadiq Hussain and  Syed Mazhar Ali decided to set up Maymar Consulting Engineers and Architects. Just seven years later, the firm decided to move into the construction and housing services space, hence the creation of Maymar Housing Services (Pvt.) Limited.

Between 1973 and 1980, Maymar built 1150 apartments and more than 100 bungalows. It also built a low-cost project of 225 apartments for the Capital Development Authority in Islamabad.

But its capstone project was Gulshan-e-Maymar, started in 1980. It was initially meant to be a 139-acre model community just outside (then) Karachi, but it quickly expanded to over 1,000 acres, introducing amenities which were not not available in the city at the time. Construction continued, with the company developing another roughly 1,300 apartments, more than 300 bungalows, and around 2,950 units of low-income housing in Maymarabad.

Maymar’s approach to construction is simple: if we built it, we will slap our name on it. This is why you get the Maymar Heights, Square, View, Plaza, Court, Garden, Terrace, Arcade, Complex, Avenue, Lake View, and Bungalows. One feels that the Maymar marketing team opened a thesaurus and simply copy pasted whatever was listed next to ‘house’.

We say this in jest, because the approach has clearly worked. The publicly listed Ismail Mills is struggling, and as many textile mills before them, is deciding to give up being a textile mill at all. It can’t hurt to merge with a company that clearly knows its core business. The recent government construction package incentivising real estate projects also can not hurt. 

In effect, the transaction is a direct public listing of Maymar Holdings without having to go through the full initial public offering (IPO) underwriting process, which can be both time consuming and expensive. Maymar Holdings clearly wants the prestige of being publicly listed and the option of issuing new shares, without the expense of an IPO. 

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