Suhail Jute Mills faces delays in land sale

July 23,2025(MLN): Suhail Jute Mills Limited (PSX: SUHJ) has reported that, despite its best efforts during the quarter, meaningful progress on the planned land sale remains stalled, primarily due to ongoing economic challenges and the prevailing political and security situation in Khyber-Pakhtunkhwa.

In its progress report, the company reiterated that the commencement of commercial operations is entirely dependent on securing adequate financing for working capital and settling outstanding obligations to creditors, including institutions with court-issued decrees.

A viability plan previously presented to the Securities and Exchange Commission of Pakistan (SECP) was accepted after scrutiny, leading the SECP to conclude proceedings against the company under Section 304 of the Companies Act, 2017, on April 18, 2023.

The proposed land development plan involves converting existing land into smaller-sized industrial plots, beginning with the sale of 20 acres for approximately Rs480 million.

The funds would be used to convert 576 kanals of land into various-sized industrial plots, with estimated proceeds of around Rs2.5 billion from their eventual sale.

The company highlighted that assets have become available for sale following the merger of (Colony) Sarhad Textile Mills Ltd. into Suhail Jute Mills Limited.

Additionally, it owns a fully functional jute manufacturing facility maintained in running condition.

The unit is expected to generate revenue once working capital is secured and commercial operations resume.

Proceeds from land sales are projected to cover immediate liabilities and provide the margin needed to raise working capital. The plotting and sale of land will not affect the jute manufacturing and ancillary facilities, which remain intact.

The company noted that its principal sponsors have continued to increase their financial stake and have injected further funds to keep operations afloat.

Records show that the sponsors have sustained the company financially during its non-operational phase and remain committed to restarting operations to recover their investment and benefit all stakeholders.

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