PSMC shareholders greenlight SMC's 62.84% stake repurchase

February 12, 2024 (MLN): The shareholders of Pak Suzuki Motor Company Limited (PSX: PSMC) have resolved to authorize Suzuki Motor Corporation (SMC), Japan, the majority shareholder of PSMC, to repurchase 62.84% of the shareholding at a buy-back price of Rs609 per share as determined by the Voluntary Delisting Committee (VDC).

According to a notice issued by the company on PSX, the aforementioned agenda was approved during the Extra Ordinary General Meeting of the company held on February 09, 2024.

Moving forward under the delisting process, it is crucial to observe whether minority shareholders will consent to sell their stake at the agreed-upon price set by the company.

Furthermore, the members of the company have authorized any two of the company executives, Toshiyuki Ikuma [CFO] and Hiroshi Kawamura [CEO] and Abdul Nash [Company Secretary] to sign, execute and deliver any document, and to do any other act, deed or thing required to complete the delisting of the company.

To recall, on October 19, 2023, the BoD resolved to delist the company from PSX. 

Considering this, Suzuki Motor Corporation 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 under the regulations or as may be determined by the PSX or the Securities Exchange Commission of Pakistan (SECP).

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 pertinent to note that Investor Nadeem Nisar, who holds more than 10% shareholding in PSMC has formally contested the delisting price of Pak Suzuki Motors shares, challenging its valuation and citing procedural irregularities.

Last week, he issued a letter to the PSX and SECP in which he expressed deep concerns regarding valuation discrepancies and procedural lapses in the delisting process.

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