Sapphire Fibres Limited has announced the approval of a merger plan with Reliance Cotton Spinning Mills Limited (RCSML). The Board of Directors of Sapphire Fibres approved the Scheme of Compromises, Arrangement, and Reconstruction, which will merge Reliance Cotton Spinning Mills into Sapphire Fibres.
The company disclosed this development through a notification filed with the Pakistan Stock Exchange (PSX) on Friday.
“The Board of Directors has Approved the Scheme of Compromises, Arrangement and Reconstruction for Amalgamation/Merger of Reliance Cotton Spinning Mills Limited (RCSML) and its members with and into Sapphire Fibres Limited in terms of provisions of Sections 279 to 283 read with Section 285 and all other enabling provisions of the Companies Act, 2017,” read the Sapphire Fibres’ notice.
The company said that merger, in accordance with provisions of Sections 279 to 283 and Section 285 of the Companies Act, 2017, will be carried out under the guidance of the Honorable High Court of Sindh at Karachi.
Upon completion of the merger, Reliance Cotton Spinning Mills will be dissolved without liquidation, and shares of Sapphire Fibres will be issued to the registered shareholders of Reliance Cotton Spinning Mills, in accordance with the SWAP ratio as determined by M/s. Shinewing Hameed Chaudhri & Co, Chartered Accountants.
However, the merger is subject to several conditions, including the approval of shareholders, creditors, and relevant regulatory bodies, as well as final approval from the Sindh High Court. Additionally, the company must meet corporate, legal, and regulatory formalities to finalize the process.
Sapphire Fibres stated that they would continue to keep stakeholders informed about the progress of the merger and any related developments.
Sapphire Fibres Limited was incorporated on June 5, 1979, as a public company under the Companies Act, 1913 (now the Companies Act, 2017). The company is primarily engaged in the manufacturing and sale of yarn, fabrics, and garments.
Reliance Cotton Spinning Mills Limited, on the other hand, was incorporated on June 13, 1990, as a public limited company under the Companies Ordinance, 1984 (now the Companies Act, 2017). The principal activity of RCSML is the manufacturing and sale of yarn.
