The Karachi Stock Exchange (KSE) move to give maximum benefit to minority shareholders have convinced listed companies management to increase the buy-back value by as much as 45 percent.
The protection of interest of the minority shareholders is always a top priority of the Exchange, said Moin M. Fudda, managing director and chairman, Voluntary Delisting Committee of the Karachi Stock Exchange.
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.
The KSE Voluntary De-listing Committee, in its meeting held on June 29, 2004, 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 endeavour to arrive at a mutually agreed fair buy-back price, between sponsors & the Exchange.
In order to compensate the minority shareholders, as under: Tritex Cotton Mills Limited: The minimum buy-back price is Rs 25 per share as against Rs 17.25 per share, offered by the sponsors, Zaman Textile Mills Limited: The buy-back price is Rs 65 per share as against Rs 45.05 per share, earlier offered by the sponsors.
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 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, Fudda added.