BoD greenlights PSMC's delisting from PSX

October 19, 2023 (MLN): The Board of Directors (BoD) of Pak Suzuki Motor Company Limited (PSX: PSMC) on Thursday resolved to delist the company from the Pakistan Stock Exchange (PSX).

This development is in line with rule 5.14 of the Voluntary Delisting rules of the Rule Book for which the company shall submit a formal application to the PSX.

Considering this, Suzuki Motor Corporation, the majority shareholder of the company has been authorized to buy back ordinary shares held by the minority shareholders of the company to an extent and at a price to be determined in accordance with the regulations or as may be determined by the PSX or the Securities Exchange Commission of Pakistan (SECP).

To recall, on October 12, 2023, the majority shareholders of PSMC expressed their intent to purchase all outstanding shares of PSMC and potentially de-list the company.

It is important to mention that under rule 5.14.1 of the listing regulations as per the PSX rulebook, the proposed purchase price can not be less than the highest of the following:

1. Closing Market Price one day preceding the date of the board meeting in which the company resolves to delist from the Exchange
2. 3-year Average Market Price one day preceding the date of the board meeting in which the company resolves to delist from the Exchange (using Closing Market Prices)
3. Intrinsic Value Per Share on the basis of the revaluation of assets of the company.
4. P/E Multiple approach (for profitable companies)
5. The maximum price at which the Sponsors had purchased these shares from the open market in the preceding one year.

Accordingly, the expected purchase price of the majority shareholders of Pak Suzuki Motor Company Limited (PSX: PSMC)'s intent to acquire all remaining shares will likely be Rs222 per share, offering a premium of Rs67.8 compared to the current market price of Rs154.2 per share.

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