KARACHI, Dec 11: The Karachi Stock Exchange has brokered better deals for minority shareholders, where companies have sought to buy-back shares.

KSE Managing Director Moin Fudda said in a statement issued on Thursday that protection of interests of the minority shareholders was always a top priority for the Exchange. He said that it was in the best interest to allow sponsors of closely held, illiquid companies, to buy-back the equity vested in the minority shareholders, where there was little or complete lack of 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 Mr Fudda.

With that objective in sight, on December 9, 2003, the relevant committee of the Exchange considered the applications of buy-back of shares by the sponsors and subsequent delisting of the companies, under the relevant KSE Listing Regulations. The Exchange endeavoured to arrive at a mutually agreed fair buy-back price, between sponsors and the KSE so as to strike best bargain for minority shareholders.

Offered and accepted price in the companies decided on December 9, included: (1) Alhamd Textile Mills Limited, where the buy-back price was agreed at Rs42 per share, which was twice the price of Rs21 per share, earlier offered by the company; (2) Spencer & Co (Pakistan) Limited, where the buy-back price was concluded at Rs200 per share as against Rs155 per share at which the sponsors had earlier stipulated they would repurchase the minority stake; (3) Star Textile Mills Limited, at the insistence of the Exchange, the buy-back price was enhanced by the sponsors, from Rs50 per share to Rs60 per share; and (4) Pioneer Cables Limited, the new mutually agreed buy-back price was settled at Rs25 per share as against the initially offered price of Rs17.79 per share.

The KSE MD contended that the core objective of the Exchange was to maintain the quality of listed securities and simultaneously create openings for induction of new companies, with sound track record and commanding larger public interest.

He observed that on the satisfactory completion of buy-back process and subsequent formalities thereof under the relevant Regulations of the Exchange, those companies would be delisted.

In order to facilitate shareholders who may not be able to lodge their shares during the initial buy-back period, it would be binding on the sponsors of delisted companies to buy-back shares at prices fixed by the Exchange for a further period of one year, said Mr Fudda.

He stated that during the current year, the KSE had attracted new equity listings, such as those of Oil and Gas Development Company Limited, TRG Pakistan Ltd and Pakistan International Container Terminal Ltd. These had replaced some of the companies that had closely held equity and practically zero trading activity and were now being voluntarily delisted.