Hallmark Company Ltd. sells all shares to Supernet Infrastructure Solutions (Pvt) Ltd.

LAHORE: On 13 April 2023, the company secretary of Hallmark Company Limited sent a letter to the Pakistan Stock Exchange (PSX), detailing that in accordance with Section 96 and 131 of the Securities Act, 2015 and clause 5.6.1 of PSX Regulations, Hallmark Company Limited’s shareholders, Mr. Irtaza Zafar Sheikh and the Board of Directors of Gazpak (Private) Limited, have agreed to sell all of the Company’s shares to Supernet Infrastructure Solutions (Private) Limited. 

It was also disclosed that the shares being sold by Sheikh and GPL, collectively, represent approximately 62.84% of the Company’s issued and paid-up capital, totaling 314,220 shares. 

The Share Purchase Agreement for the divestment was signed on April 12, 2023 and is subject to the terms of the agreement, including the issuance of a public offer, receipt of necessary approvals, and completion of other closing formalities. 

The letter included a disclosure form for reference. It was further communicated that the PSX will be notified once the Proposed Divestment is concluded and requested the TRE Certificate Holders of the Exchange to take note of the decision.

The tragic trajectory of Hallmark (Pakistan), unlike its American namesake 

The tale of Hallmark Company Limited is full of twists and turns that would make your head spin. It has had more ups and downs than a rollercoaster, and it seems like luck has not been on their side. They have struggled to find their footing and to figure out what they really want to be when they grow up, so the current divestment is not a shocker.

The Shakespearean tragedy of Hallmark Company Limited started in 1981, when they started as a Public Limited Company under the repealed Companies Act, 1913. They were registered as an insurance company, but it wasn’t long before they started to struggle. It’s a story of ambition, failure, and redemption – or at least, that’s what they were hoping for. 

Hallmark Company Ltd tried their hand at the insurance game, but it was an utter disaster. Then, they decided to pivot to IT services, and while it was not as bad as their insurance services, it still wasn’t the grand success they had hoped for. 

Hallmark had been struggling for years to meet the minimum paid up capital requirement for an insurer set by the Insurance Ordinance 2000. This requirement was increased to Rs 300 million, a staggering amount that Hallmark was unable to procure, resulting in the company ceasing to underwrite insurance business in January, 2003.

Despite having an investment property of Rs 800,000 that generated a monthly return of Rs25,000 in rent, the auditors’ report from 2014 revealed that there were no title documents or valuation of the land, nor could the income generated from it be verified. The management, in their annual report, confusingly blamed the deteriorating “bad law and order situation” in Karachi as one of the reasons why they could not meet the minimum requirement.

Then they pivoted into the information technology industry. The company saw an opportunity to reinvent itself yet again, when Pakistan entered the digital age and 4G services became available in 2014. It shifted its focus to offering devices for data centers, end user computing, and identity and security portfolio, along with pre and post-sale support services.

After a series of back to back calamities, Hallmark finally saw a glimpse of success as it achieved something it had been longing for – revenue. In 2018, the company’s revenue reached Rs14 million, followed by a jump to Rs 18 million in 2019 and then Rs 15 million in 2020. The golden days of Hallmark were only starting and it appeared to be on an upward trajectory until 2021, which proved to be a challenging year due to the Covid-19 pandemic, resulting in reduced business.

Tired of grappling with one setback after the next, in August 2021, the company accepted defeat and started preparing for a possible buyout. Irtaza Zafar Sheikh and GAZPAK (Private) Limited offered Muhammad Munir Muhammad Ahmed Khanani Securities Limited to acquire 82,890 shares and control of Hallmark Company. 

Hallmark is set to divest all of its shares to Supernet Infrastructure Solutions (Private) Limited. This tale of tragedy might finally be coming to an end and the company might experience sunnier days, under the ownership of Supernet Infrastructure Solutions (Pvt) Ltd.