Dewan Farooque Motors Limited has announced the successful assembly of over 300 units of its electric vehicle model, ‘Honri – VE’, as part of its toll manufacturing agreement with Eco-Green Motors Limited.
The company shared the update in a notice issued to the Pakistan Stock Exchange (PSX) on Tuesday, fulfilling the requirements of Section 96 of the Securities Act, 2015 and Clause 5.6.1(a) of the PSX Regulations.
“By the grace of Almighty ALLAH, we would like to inform you that till date more than 300 units of electric vehicles have successfully been assembled and handed over to Eco-Green Motors Limited for onward deliveries to its Customers,” read the company’s notice.
The notice further highlights that the assembled electric vehicles have been successfully handed over to Eco-Green Motors Limited for delivery to customers.
Dewan Farooque Motors expressed its gratitude towards all stakeholders for their continued trust and confidence in the company, particularly following the restart of operations.
Dewan Farooque Motors, part of the Yousuf Dewan Group, was established in 1998 and entered into contracts with Hyundai and KIA to assemble, manufacture, and sell their vehicles in Pakistan. Initially successful, the company’s sales grew from Rs 5.5 billion in 2003 to Rs 10.6 billion in 2006, and it provided substantial dividends to shareholders.
However, the company’s fortunes changed in 2008, experiencing significant losses that culminated in shutting down production in 2010. By 2009 and 2010, Dewan Farooque had a negative break-up value per share, indicating severe financial distress, with liabilities far exceeding assets. Creditors initiated litigation to recover over Rs 7 billion, and the company’s financial woes prevented it from sustaining working capital or covering loan markups.
Despite attempts to restart production in 2014 and 2018, the company continued to incur losses. By 2022, net sales had plummeted to Rs 144,000 from a peak of Rs 9 billion. By the end of the 2023 financial year, the break-up value per share had further deteriorated to Rs -24.3, with shareholders’ equity at Rs -3.2 billion.
Additionally, loans to associated companies became unrecoverable as they also faced losses, further devaluing Dewan Farooque’s assets.
