Pak Suzuki announces yet another shutdown of automobile, motorcycle plants

Pak Suzuki Motor Company (PSMC) announced on Tuesday another temporary shutdown of its automobile and motorcycle plants amid inventory shortage.

In its notice to the Pakistan Stock Exchange (PSX), PSMC said: “Due to shortage of inventory level, the management of the company has decided to shut-down automobile plant from October 30, 2023 to November 03, 2023 and motorcycle plant from November 01, 2023 to November 03, 2023.”

During the course of the year, the Japanese automaker has announced shutdowns over a dozen times. Last week, it said it would keep its automobile plant shut till October 27.

It made similar announcements in September, August, June and May as well, citing a lack of raw material.

Last week, the Board of Directors (BoD) of Pak Suzuki Motor Company (PSMC) decided to purchase all outstanding shares of the company and delist from the PSX, citing low valuations and losses.

As per the notice, the PSMC attributed the decision to delist to several factors.

“The operations of Pak Suzuki resulted in losses in 2019, 2020 and 2022. It has also resulted in a loss up to the 3rd quarter of this year; from 2019, dividends have not been paid to shareholders except for 2021; the current share price of Pak Suzuki is at a historically low level and the number of daily transactions/sales are limited,” it said.

“In view of the foregoing, the sponsor and majority shareholder, Suzuki Motor Corporation, intends to obtain full ownership of Pak Suzuki by purchasing all outstanding shares and securities held by minority shareholders, in order to increase ownership and delist the company from the PSX.

“Considering the unfavourable situation for minority shareholders, it would be beneficial for them to be offered a fair exit,” it said.

Despite the poor state of the auto sector, the company’s share price has been hitting the upper limit ever since Pak Suzuki announced the consideration of delisting on October 12.

Back then, the company stated that PSMC will review and consider the majority shareholder’s intent to purchase all outstanding shares of the company and delist from the PSX.