Pak Suzuki Motor Co Ltd, Pakistan’s largest carmaker, is considering a proposal from its parent company, Suzuki Motor Corp, to buy out minority shareholders and de-list from the Pakistan Stock Exchange (PSX).
Pak Suzuki decision to sell its minority shares was prompted by a slump in sales, high costs, and currency volatility. These factors have led to a net loss of 9.68 billion rupees in the first half of the fiscal year, compared to a profit of 1.15 billion rupees in the previous year.
Pak Suzuki’s move reflects the majority shareholder‘s intention to gain full control and influence over the company’s future direction. It is expected to significantly impact PSMC’s dynamics and governance, as well as the automotive sector in Pakistan.
The company has been facing stiff competition from new entrants like Hyundai and Kia, and it has experienced production shutdowns due to low demand and supply chain issues.
Analysts suggest that de-listing may be due to the company’s lack of confidence in the Pakistani market and the benefits of remaining on the PSX.
While this decision might not significantly affect the auto sector, it reflects broader challenges faced by companies on the PSX, leading to share buybacks and de-listings in recent months.