Bolan Castings Ltd. has announced a halt in its production activities due to a significant drop in customer orders and severe financial strain caused by delays in payments from its main customer.
The company is a subsidiary of Millat Tractors Limited.
Bolan Castings disclosed this development in a notice sent to the Pakistan Stock Exchange (PSX) on Friday.
“Due to a drastic drop in orders from our customers, the Company is facing a drop in sales. Additionally, delays in payments from our main customer are also causing severe financial strain. Hence, the management of the Company has decided to halt the production activities of the Company from Monday, August 26, 2024, till further notice,” read the notice issued by Bolan Castings’ Company Secretary Arafat Mushir.
Bolan Castings has requested the PSX to inform the TRE Certificate holders of this material information. The company has also notified the Securities & Exchange Commission of Pakistan (SECP) about the situation.
Bolan Castings Limited is a public listed company incorporated in Pakistan on July 15, 1982 under the Companies Act, 1913 (now the Companies Act, 2017). The company manufactures and sells casting for tractors and automotive parts.
On Thursday, Millat Tractors announced the suspension of its production operations due to unresolved issues surrounding the Goods and Services Tax (GST) refunds.
MTL said in a notice to to the PSX that the GST on tractors is set at 10%, while the GST on input raw materials is 18%. This discrepancy has led to a continuous accumulation of refund claims.
However, despite the company’s efforts to seek clarification, the government has yet to establish a mechanism for processing these refunds, it said.
As a result, Millat Tractors stated that it is “constrained to stop production till further notice.”
