Shield seeks exit from PSX citing low liquidity and annual losses

KARACHI – In a significant corporate move, Shield Corporation Limited has announced its intention to voluntarily delist from the Pakistan Stock Exchange (PSX). The decision was ratified by the company’s Board of Directors in a meeting held on Wednesday.

The board resolved to proceed with delisting under Rule 5.14 of the PSX’s Voluntary Delisting Rules. The primary reason cited is the “significantly low” liquidity of the company’s shares, with an average daily trading volume of just 923 shares over the past year.

In a disclosure to the PSX, the company outlined a series of challenges justifying the delisting:

• Low Liquidity: The minuscule trading volume indicates a lack of investor interest and makes it difficult for shareholders to buy or sell shares without significant price impact.

• Sustained Losses: The company has reported financial losses over the last two consecutive years.

• No Dividend Payouts: Shareholders have not received any dividends since 2021.

• Management Focus: The delisting will “reduce complexity and free up management time to focus on the core business.”

The board stated that under these circumstances, delisting and providing a fair exit opportunity to minority shareholders is in their best interest.

The company will now submit a formal application to the PSX. Upon acceptance, a general meeting of shareholders will be convened to seek approval through a special resolution.

A critical next step will be the determination of the buyback price. The company’s sponsors have been authorized to purchase all ordinary shares held by minority shareholders. The final price will be determined in accordance with PSX regulations or as set by the PSX and the Securities and Exchange Commission of Pakistan (SECP).

Shield Corporation Limited is a publicly listed company, but its profile has been low in recent years. Historically, the company has been involved in the business of security and safety solutions.

The company is ultimately owned and controlled by its sponsors. The resolution makes it clear that the sponsoring shareholders are now seeking to take full, 100% ownership of the company by buying out the public float which is less than 25%.

Almost 75% of the company is owned by the Qassim family, namely the CEO, Haroon Qassim and directors Ebrahim and Salman Qassim, and their spouses. The family also have significant stake in the English Business Manufacturers, the proprietor of Peek Freans brand in Pakistan and a major consumer good brand. The Qassim family is also subsequently invested in the pharmaceutical industry.

Key authorized officers named in the delisting process are Mr. Mohammad Haroon Qassim, the Chief Executive, and Mr. Yasir Yousuf Chhabra, the Chief Financial Officer. This move would return the company to full private ownership, ending its tenure on the stock exchange.