February 25, 2020 (MLN): The Board of Directors of Service Fabrics Limited have considered the option to purchase assets of Amer Hotel, Lahore, in a bid to revive the operations of the company. According to a notification sent by the company in this regard, the proposed acquisition will be financed by the two directors of the Company who are also the majority owners of the hotel currently.
The valuation of the assets of the Hotel has been carried out by Madadgar (duly registered valuator with Pakistan Banks’ Association) in January 27, 2020. Whereas as the assessment of goodwill of continuing business has been carried out by Aamir Salman Rizwan Chartered Accountants (a QCR compliant firm with Institute of Chartered Accountants of Pakistan) in January 7, 2020.
Based on the respective valuations, the consideration value of the acquisition transaction has been arrived as follows:
Basis | Amount (Rupees) |
Valuation of Land carried by Madadgar Valuators | 400,000,000 |
Valuation of Buildings carried by Madadgar Valuators | 114,100,000 |
Valuation of AC Plants and Equipment carried by Madadgar Valuators | 23,800,000 |
Present Value @ 10% of current net profit per year with the growth of 10% p.a. from the Hotel Business for next 10 years as Goodwill of the running business (the net profit for the 2019 has been agreed at Rs. 7 million the present value of which with increase of 10% per anum works out to be) carried by Aamir Salman Rizwan Chartered Accountants, Lahore | 130,333,153 |
Total Valuation | 668,233,153 |
The Board of Directors has decided to go ahead with the acquisition of the hotel and this acquisition shall be earnings accretive immediately after the acquisition.
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