Suzuki Motor Corporation (SMC) of Japan on Thursday announced its acceptance to purchase the ordinary shares of its Pakistani subsidiary, Pak Suzuki Motor Company Limited (PSMC) at Rs 609 per share.
According to a notice sent to the Pakistan Stock Exchange (PSX), Suzuki Motor, as the majority shareholder and sponsor of Pak Suzuki, conveyed its decision to go ahead with the purchase as long as it is able to purchase at least another 13.9 million shares i.e 62.84% of the ordinary shares with shareholders other than Suzuki Motor Corporation.
A few days earlier the Voluntary Delisting Committee (VDC) of the Pakistan Stock Exchange (PSX) had determined a minimum buyback price of Rs609 per share as against Rs406 offered by Pak Suzuki Motor Company Ltd (PSMCL) for delisting.
In October 2023, the SMC announced its proposal of acquiring all its ordinary shares held by minority shareholders to delist from the PSX.
Pak Suzuki’s financial health has been another challenge in recent years.
Pak Suzuki reported continuous fluctuations in profits in the last few years. Its sales improved from Rs 76.72 billion in 2020 to Rs 202.47 billion in 2022. However, the company reported a net loss of Rs 6.34 billion in 2022.
The loss per share in 2022 was a discouraging sign for shareholders because it must have increased concerns regarding the potential returns in the form of dividends.
