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Dewan Farooque Motors Limited (DFML) announced on Monday that it has entered into a Technology License Agreement (TLA) with Korea's KIA Corporation for the production and assembly of its vehicles in Pakistan.

The development was announced through a Pakistan Stock Exchange (PSX) notice.

DFML, currently in the defaulter segment, has already seen its stock price surge 150% in less than a month — from Rs4.5 to Rs11.41 at close of trading on Monday. The KSE-100 Index has hardly moved during this period.

Its financial results indicate it is running losses with a loss per share (LPS) of Rs1.33 for fiscal year ended June 2022, and another LPS of Rs0.76 in the first quarter (July-Sep) of FY23.

Currently, Lucky Motor Corporation Limited (LMC) is assembling KIA brand vehicles in Pakistan, and produces SUVs Sorento, Sportage, Stonic and hatchback Picanto. It is also the assembler of French automaker's SUV Peugeot 2008.

“There is no clarity on whether Dewan Farooque Motors would enter the passenger cars' segment or commercial vehicles,” Ismail Iqbal Securities' auto sector analyst Muqeet Naeem told Business Recorder after the announcement.

If the plan goes through, it will not be the first time DFML will assemble KIA-brand vehicles in Pakistan.

An earlier report suggested the company produced 95,429 automobiles – including Kia Classic, Kia Spectra, Sportage – between 2000 and 2011.

Comments

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samir sardana Nov 07, 2022 07:39pm
DFML HAS ACCUMULATED LOSSES OF RS 422 CRORES AND CAPITAL OF RS 138 CRORES - END 2021 HOW WILL IT ASSEMBLE KIA ? WHO WILL GIVE WORKING CAPITAL ? DFMP HAS A RS 100 CRORES INVEST IN DEWAN CEMENT (DCL) - WHOSE KSE PRICE IS BELOW COST IN DFMP BALANCE SHEET ! DEWAN CEMENT HAD A RS 12 LACS PBT IN 2022 AND A 27 CRORE PBT LOSS IN 2021. DEWAN CEMENT HAS A RS 2000 CRORES NET WORTH IN 2022 - BUT OF THAT 1000 CRORES IS REVALUATION RESERVE ONLY THE LAND MAY BE CONSIDERED BY A BANK FOR A LOAN GRANTED THAT DEPRECIATION IS 100 CRORES - AND THAT INCLUDES THE REVALUATION AMOUNT - BUT A RS 100 CRORE CASH PROFIT + REVALUED LAND OF DCL, IS ALL THAT DFML HAS SO IF KIA FUNDS THE WORKING CAPITAL BY TAKING THEIR CKD MONEY AFTER SAY 3-5 MONTHS - THEN THE DFML MACHINERY IS ENOUGH FOR THE CKD/SKD ASSEMBLY AND THEN THIS STOCK CAN RISE 10 TIMES IN 6 MONTHS OF PRODUCTION ! dindooohindoo IT IS LIKE A TOLLING NO BRAIN OPERATION ! COST OF CKD + FX IS PASS THROUGH TO BUYERS ! THERE CANNOT BE A LOSS !
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Irtaza Malik Awan Nov 08, 2022 02:39pm
Does this mean KIA-Lucky partnership is dead?
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KK Nov 10, 2022 02:41pm
@samir sardana, but the thing is that Banks would be hesitant to lend to certified "chors' like Dewan Group.
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