The Board of Directors (BoD) of TPL Life Insurance and Dar Es Salam Textile Mills Limited have approved a scheme of arrangement for merger of the two companies.

The development was shared by TPL Corp, the parent company of TPL Life Insurance, in a filing to the Pakistan Stock Exchange (PSX) on Wednesday.

“This is to update that the respective BoDs of TPL Life and Dar Es Salam Textile Mills Limited (DSML) have approved the draft scheme of arrangement under Sections 279 to 283 and 285 of the Companies Act, 2017, for, inter alia, the merger, by way of amalgamation, of the entire business and undertaking of TPL Life (including all its assets, rights, liabilities and obligations) with and into DSML,” read the notice to the bourse.

Back in September, TPL Life Insurance Limited entered into a Memorandum of Understanding (MoU) with DSML to explore the possibility of a potential merger, TPL Corp shared in a notice to the bourse back then.

Meanwhile, TPL Corp in its notice on Wednesday informed that under terms of the scheme the name of DSML shall stand altered to ‘TPL Life Insurance Limited’, and the principal line of business shall be changed.

“As a consequence of the merger, DSML shall issue shares to the shareholders of TPL Life based on a swap ratio of 1 (one) ordinary share of DSML for every 1 (one) ordinary share of TPL Life held by its shareholders,” read the notice.

TPL Corp, which is principally engaged to make investments in group and other companies, shared that the said scheme is subject to the completion of necessary corporate and regulatory formalities, including TPL Life and DSML obtaining necessary shareholders’ and regulatory approvals (to the extent applicable) in accordance with applicable laws, and sanction of the scheme by the High Court of Sindh.

Meanwhile, DSML, which is involved in the business of manufacturing and selling yarn, remains on the defaulter list on PSX.