Citing economic conditions, Lucky Core Industries Limited’s (LCI) subsidiary Lucky TG (Private) Limited (LTG) will buyback its shares in proportion to the company’s shareholding.
LCI announced the development in its notice to the Pakistan Stock Exchange (PSX) on Thursday.
Sharing an update on the status of Lucky TG (Private) Limited (LTG), the company informed that LTG was established as a joint venture company between TGL and LCI, having a stake of 49% and 51%, respectively, with the primary objective of developing an advanced greenfield float glass manufacturing facility with a production capacity of up to 1000 tons per day.
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“The facility was intended to be setup in two phases having production capacity of 500 metric tons per day each with expectation that the facility would become commercially operational during FY2024-25,” LCI said in its notice.
“However, uncertain economic conditions have caused a delay and necessitated a reassessment of the project timelines. During such period that the project is delayed, the funds in Lucky TG remain unutilized,” it said.
Therefore, the Board of Directors of Lucky TG has granted Lucky TG “approval to buy-back/purchase its shares in accordance with section 88 of the Companies Act 2017 read with relevant provisions of the Companies Regulations 2024, subject inter alia, to obtaining requisite approvals”.
As per the notice, the buy-back will be in proportion to the company’s (LCI) current shareholding (i.e. 51%) in Lucky TG and LCI will continue to retain 51% shareholding in Lucky TG following the buy-back.
“Lucky TG will continue to remain solvent and be able to meet its financial obligations subsequent to the buy-back of shares,” it added.
The development comes as industries in the South Asian country remain engulfed in a myriad of economic challenges including rising interest rates, high energy tariff, supply chain issues and dwindling demand.
However, the joint venture partners i.e. TGL and LCI remain committed to completing the project as soon as the economic environment becomes more conducive.
A similar statement was released by TGL in its filing to the bourse on Thursday.