Arif Habib Securities Limited has brokered a deal between Dewan Mushtaq Group and Allied Group in which Dewan Group has taken over Allied Groups' stake in Allied Motors Limited.
The company used to be called Allied Tractors Limited and assemble tractors of the Ford brand. During 1990s the company had a dispute with Ford and the plant has been closed for a number of years.
The equity of Allied Motors Limited is negative and the book value per share after taking into account revaluation of assets is below Rs 4.
The Dewan Group bought 4,753,259 shares (53%) at a rate of Rs 1/- and in addition has agreed to take on the responsibility for the discharge of the liabilities of the Company.
The deal was finalised after talks with a number of parties, as it was felt that the interests of the minority shareholders would best be looked after by the Dewan Group.
The agreement between the Groups was signed on Wednesday, 14 April 2004 and the payment and share transfer process was started the next day.
The deal was reported to the stock exchange by Arif Habib Securities Limited on 15 April including notices under the Listed Companies (Substantial Acquisition of Voting Shares and Take-overs) Ordinance, 2002.
The Dewan Group considers Allied Motors Limited to be a strategic asset and a good fit to its existing automotive business portfolio.
Under the Listed Companies (Substantial Acquisition of Voting Shares and Take-overs) Ordinance, 2002 the Group has to make a Public offer for purchase of shares of Allied Motors Limited.
The Dewan Group intends to offer each minority shareholder the option to sell his shares at the same price as offered to the Allied Group (Rs 1 per share). Dewan Group would, however, be pleased if the shareholders repose trust in the management of the Group and continue to hold the shares.
This divesture will enable the Allied Group to concentrate on its existing business partnership with Caterpillar, USA.
Allied Engineering & Services Limited, an Allied Group company, holds the distributorship for Caterpillar for Pakistan.
The company has been highly successful in making Caterpillar the brand of choice for generators and heavy equipment.
Arif Habib Securities Limited is pleased that it has been able to play a part in reviving a dormant company listed on the stock exchange.
We hope that the shares of the company will revive and perform well.
The team that finalised the deal consisted of Arif Habib, Chief Executive and M. Akmal Jameel, Head of Corporate Finance & Business Development.