Service Industries Limited on Wednesday announced authorisation to make a long-term equity investment of Rs 1.5 billion in Service Long March Tyres Limited, an associated/subsidiary company.
According to a notice sent to the Pakistan Stock Exchange (PSX), shareholders of Service Industries conducted an extraordinary general meeting on January 17, 2024, and approved long-term equity investment in its subsidiary.Â
Service Long March Tyres commenced its operations in March 2022. Therefore, Service Industries’ authorisation of Rs 1.5 billion for equity investment in its subsidiary must be based on some strong ground footing.
Service Industries reported a profit of Rs 1.12 billion in the first nine months of FY2023 from Service Long March compared to a Rs 513 million loss in the same period last year.
Therefore, increasing the equity investment in a profit-generating subsidiary is a suitable option for Service Industries because it can potentially generate sustainable dividend income.
