Companies asked to raise their buy-back offers

KARACHI (December 12 2003): The Karachi Stock Exchange (KSE) has asked number of companies to raise their buy-back offers in order to provide maximum benefit and protection to small investors.

According to a release issued by the KSE on Thursday, protection of interest of the minority shareholders is always a top priority of the Exchange, said Moin Fudda, Managing Director of the KSE.

It is desirable to allow sponsors of closely held, illiquid companies, to buy back the minority shareholding where there is little or no public interest. In this respect, the Exchange has kept a vigil when deciding the buy-back price at which the sponsors desire to purchase the minority shareholding, said Fudda.

Keeping in view this objective, on December 9, 2003, the relevant committee of the Exchange considered the applications of buy-back of shares by the sponsors and subsequent delisting of the companies, under the relevant Listing Regulations of the Exchange and endeavoured to arrive at a mutually agreed fair buy-back price, between sponsors and the Exchange, to compensate the minority shareholders as given under:

Alhamd Textile Mills Ltd: The buy-back price is Rs 42 per share as against Rs 21 per share, earlier buy-back price fixed by the sponsors of the company.

Spencer & Co (Pakistan) Ltd: The buy-back price is Rs 200 per share as against Rs 155 per share, earlier offered by the sponsors.

Star Textile Mills Ltd: The buy-back price is enhanced by the sponsors to Rs 60 per share as against Rs 50 per share, earlier offered by them.

Pioneer Cables Ltd: The new mutually agreed buy-back price is Rs 25 per share as against the initially offered price of Rs 17.79 per share. The core objective of KSE is to maintain the quality of listed securities and simultaneously create openings for induction of new companies, with sound track record and having larger public interest, said Fudda.

On satisfactory completion of buy-back process and subsequent formalities thereof under the relevant Regulations of the Exchange, these companies will be de-listed.

In order to facilitate those shareholders who may not be able to lodge their shares during the initial buy-back period, it will be binding on the sponsors of the de-listed companies to buy-back the shares at the prices fixed by the Exchange for a further period of one year, said managing director of the KSE.

During the year the exchange has attracted new listings such as Oil & Gas Development Co, TRG Pakistan Ltd, and Pakistan International Container Terminal Ltd, in place of the companies being voluntarily de-listed, with closely held capital and practically zero trading activity and public interest, Fudda concluded.

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