Pace (Pakistan) Ltd has set in motion its most ambitious clean‑up yet. In a brief notice to the Pakistan Stock Exchange on June 23, 2025, the Lahore‑based developer said its board had authorised the sale of the group’s entire 56.79 % holding (9.161 million ordinary shares) in Pace Super Mall (Pvt) Ltd to sister outfit First Capital Securities Corporation Ltd (FCSC) for cash at “not less than fair value.” The same resolution empowers management to raise fresh equity and ask lenders to swap part of their loans for shares, completing a three‑part balance‑sheet overhaul.
Investors signalled cautious approval: Pace’s share price, battered for the past three years by fire‑related closures and litigation, has risen 8 % since the notice, out‑performing the wider KSE‑All Share index in a falling market.
The company will dispose of 9,161,528 shares – its entire controlling stake – in Pace Super Mall, a vehicle that owns the beleaguered Gulberg flagship. FCSC, itself controlled by the Taseer family and already the largest shareholder in Pace, will pay cash. No valuation has been disclosed, but at par (Rs 10 each) the paper value is Rs 91.6 million; analysts note that Gulberg plots transact at several multiples of book, suggesting a likely consideration in the Rs 1.5–2.0 billion range once independent valuers pronounce. [restrict level=1]
The board will seek shareholder consent to increase authorised capital and issue new ordinary shares for cash. The proceeds are earmarked for an immediate reduction of secured bank liabilities. While the quantum has not been published, directors confirmed in a call with brokerage analysts that the offer would be “meaningful but non‑dilutive,” hinting at a rights issue priced close to market.
Finally, Pace has opened talks with its syndicate to convert a “significant portion” of remaining debt into ordinary shares. The proposal still requires credit‑committee and regulatory sign‑off, but the precedent of other real‑estate work‑outs under the Financial Institutions (Recovery of Finances) Ordinance gives the bankers latitude if shareholders take pain first.
Inside the numbers: a debt story years in the making
Pace’s balance‑sheet tells a grim tale of leveraged expansion followed by shrinking cashflow and repeated fire damage.
| Fiscal year | Total assets | Total liabilities | Total debt | YoY change | Net cash / (debt) |
| 2020 | 7,530 | 6,469 | 4,077 | — | (4,054) |
| 2021 | 7,401 | 6,434 | 3,947 | –3 % | (3,926) |
| 2022 | 7,515 | 6,967 | 4,677 | +18 % | (4,654) |
| 2023 | 7,480 | 8,657 | 6,083 | +30 % | (6,063) |
| 2024 | 13,558 | 10,771 | 5,915 | –3 % | (5,879) |
| 2025* | 13,654 | 10,689 | 6,077 | +3 % | (6,071) |
Debt has climbed 50 % since fiscal year 2021, touching Rs 6.08 billion in March 2025. The current portion of long‑term debt now equals over 98 % of fiscal year 2024 revenue, underscoring urgent refinancing pressure.
Although a Rs 526 million profit in fiscal year 2024 nudged shareholders’ funds back into positive territory (Rs 2.79 billion in paid‑up capital vs. Rs 3.18 billion accumulated losses), book value per share remains negative (-Rs0.26).
Management hopes the three‑pronged restructuring will slice gross debt to about Rs 3 billion, halving finance costs and eliminating covenant breaches.
Profile of Pace Pakistan
Founded in 1992 by the late media magnate and former Punjab governor Salmaan Taseer, Pace pioneered open‑plan retail malls in Lahore, expanding to Gujrat, Gujranwala and Karachi before listing on the then Karachi Stock Exchange in 2007.
The company’s fortunes waned after a series of fires – most notably a 2022 inferno that shut its Gulberg mall – and a brutal property downturn. Yet Pace still controls:
- Pace Barka Properties Ltd, the developer of the Woodlands housing scheme and 25‑acre Pace Circle mixed‑use project.
- Pace Super Mall, owner of the flagship on M. M. Alam Road in Lahore.
- Minority interests in Pace Tower (a stalled 33‑storey office) and Peacock Valley Hotel & Resort near Murree.
The group remains family‑run. Chair and CEO Mrs Aamna Taseer – widow of Salmaan – is also chief executive of FCSC and non‑executive chair of Media Times, the group’s newspaper and radio arm. Her son Shahbaz Taseer, kidnapped in 2011 and freed in 2016, sits on the Pace and Pace Barka boards.
First Capital, seeded in 1994 with minority partners Smith Barney (US) and HG Asia (Hong Kong), was one of Pakistan’s first full‑service investment banks. It provided underwriting, advisory and brokerage services through the boom years, and today houses the family’s capital‑markets licence.
Insiders own just over 40% of Pace (direct and through FCSC), giving them effective control but also aligning them with minority investors in any dilution.
Other players in the deal
First Capital Securities Corporation Ltd (FCSC) is the buyer of Pace Super Mall shares; it is listed on the PSX, and it reported profit after tax of Rs182 million in fiscal year 2024 on equity of Rs3.4 billion. Its balance sheet is largely unlevered, so it can fund the purchase without stretching itself.
Pace Super Mall (Pvt) Ltd is special‑purpose company that owns the fire‑damaged Gulberg mall and adjacent land. Once sold, it will sit under FCSC, allowing the Taseers to rehabilitate or redevelop the site off Pace’s balance‑sheet.
Syndicate lenders are led by Bank of Punjab, Summit Bank and Soneri Bank. Most of Pace’s exposure is classified as non‑performing; bankers prefer equity conversion to writing new cheques.
How big could the transaction be?
Because both Pace and FCSC are listed, the sale must take place at an independently determined “fair value.” The rights issue could raise a substantial amount: at the current market price of Rs5.90, a fully subscribed 1‑for‑1 offer would deliver ~Rs1.6 billion before expenses.
Combined, these elements could inject Rs 3 billion+ which would be enough to cover the Rs 2.9 billion current portion of long‑term debt due over the next 12 months and still leave headroom for capex at Pace Barka.
The Financial Institutions (Recovery of Finances) Ordinance allows banks to accept equity in settlement where the borrower is a going concern and the swap improves prospects of full recovery. In practice, lenders typically insist on:
- An immediate cash pay‑down (the sale proceeds satisfy this).
- Security over unsold development land (Barka Woodlands plots are on the table).
- A visible path to dividend resumption (possible once the debt burden halves).
Final approvals by the board could coincide with an extraordinary general meeting in August.
What happens next?
An independent valuation of Pace Super Mall expected by mid‑July. The shareholder extraordinary general meeting (EGM) to approve the asset sale and revised authorised capital is targeted for late August. The rights‑issue prospectus will likely follow within 30 days of the EGM. The debt‑equity swap documentation will be filed with the State Bank and the SECP by end‑September, aligning with lenders’ third‑quarter provisioning cycle.
If the time‑table sticks, Pace will enter fiscal year 2026 with a markedly de‑risked balance‑sheet, a lighter interest bill and freedom to reboot projects stalled by years of litigation and fire damage. For minority investors, the short‑term sting of dilution may finally buy the developer some breathing‑space – and with it, the chance to rebuild the brand that once defined modern retail in Pakistan.
This restructuring is not merely housekeeping. It represents a transfer of a troubled trophy asset to a deep‑pocketed related party, a recapitalisation that halves leverage, and a pragmatic compromise with banks. The devil will lie in execution, valuation fairness, and—above all—fire safety compliance at any resurrected mall. But for the first time since the 2022 blaze, Pace Pakistan looks to be acting, not reacting. [/restrict]
