In a recent update, we informed you that Pak Suzuki is contemplating the possibility of being removed from the Pakistan Stock Exchange (PSX). Economist Ali Khizar pointed out that this development is occurring amidst the government’s desire to expand stock exchange listings. He highlighted the market’s current state, explaining that companies don’t perceive advantages in being listed.
To clarify the situation further, Khizar explained to PakWheels.com that Pak Suzuki sees no advantage in maintaining its listing due to its low valuation and numerous regulatory obligations. These factors, combined with the company’s inability to attain the desired price in the market, have led to this decision. Khizar also pointed out that many prominent companies are not listed on the PSX.
However, it’s essential to note that if Pak Suzuki decides to leave the local market, it does not signify the company’s departure; it simply means they are departing from the PSX. Customers of Pak Suzuki should not be concerned because the company intends to continue its operations.
Following a meeting of the Board of Directors (BoD), the company officially resolved to purchase all outstanding shares and initiate the delisting process from the PSX. This decision aligns with the Voluntary Delisting rules outlined in section 5.14 of the PSX Rule Book.
As per the company’s notice, the BoD made the decision to delist Pak Suzuki from the PSX. The notice specifies that the majority shareholder has received authorization to repurchase ordinary shares from minority shareholders, with the extent and price determined in accordance with relevant regulations.
The company has cited several reasons for this decision:
- Pak Suzuki incurred losses in 2019, 2020, and 2022, with a continued loss through the third quarter of the current year.
- Dividends have been distributed to shareholders only in 2021. The share price of Pak Suzuki has reached an historically low level.
- The number of daily transactions and sales is limited.
Pak Suzuki emphasized in its statement that Pakistan remains a crucial market within Suzuki’s global strategy. The company expresses confidence in Pakistan’s future potential and its commitment to the Pakistani market.
What are your thoughts on Pak Suzuki’s choice to delist from the PSX? Please share your opinions in the comments section.
