KARACHI, June 24 Pioneer Cement Company, the underdog on the cement sector, has long last found acquirers of substantial shareholding in the company. Vision Holdings Middle East Limited (VHMEL) informed the Karachi Stock Exchange that it had bought 49.1 million shares in Pioneer.

The transaction appears to have transpired on June 18 and the local management of Pioneer Cement confirmed on query by the KSE on June 24 that the “foreign company” had indeed acquired 24.6 per cent shares in the company, the majority stake until now held mainly by the Noon Group.

The buyers are a company incorporated and registered in the British Virgin Islands with three (women) directors Miss Kate Harben; Mrs Maria Renault and Miss Jennifer Ann Perrier.

Pioneer Cement has been off and on in the news regarding a possible buyout by D.G. Khan Cement Company of the Mansha Group. But if there was any substance in those market whispers, the protracted talks have evidently ended without an outcome.

Regarding the latest developments, disclosures made under the provisions of Section 4 of the Listed Companies (Substantial Acquisition of voting Shares and Take-over) Ordinance 2002 read with Regulation 4 of the Listed Companies (Substantial Acquisition of Voting shares and Take-overs) Regulations 2008, suggested that the equity stakes in Pioneer had been bought over by the VHMEL from Malik Manzoor Hayat Noon; Javed Ali Khan and WE Financial Services Limited.

The 49.1 million shares acquired by the overseas buyers constituted approximately 24.599 per cent of the total issued and paid-up share capital of the company. The purchase price has been disclosed at Rs22 per share, but “subject to downward adjustment following completion of a due diligence exercise,” which the foreign raiders said would be conducted over the next four months after which the final price per share would be determined.

The Competition Commission of Pakistan was said to have given their clearance to the acquisition. Moreover, VHMEL stated that it had entered into a Call and Put Option Agreement with certain other shareholders of Pioneer Cement with holding that approximate to 29 per cent of the paid-up capital.

According to that agreement, “VHMEL may at any time during a period of 18 months require such shareholders to sell their stake in Pioneer to VHMEL at the final purchase price determined after the due diligence exercise for the 24.6 per cent shareholding currently being acquired by VHMEL and whereby such shareholders may after the expiry of the call period and if the call is not exercised, exercise a put option during the period of six months after the expiry of the call option period requiring VHMEL to acquire their shareholding in Pioneer at the final purchase price determined after the due diligence exercise.”

“The acquisition of further shares pursuant to the exercise of the said call and put option is, of course subject to the fulfillment of the requirements of the Listed Companies (substantial acquisition of voting shares and take-overs) Ordinance 2002 and Listed Companies Substantial Acquisition of Voting Shares and Take-overs) Regulations 2008 as is in force at the time of the exercise of option,” the statement from VHMEL said.

The “Call and put option” not being a trading product at the local equity market, much of the above statement may be 'Dutch' to an ordinary investor.

The shareholders in Pioneer Cement have, however, not been a happy lot, with the company skipping dividends for several years in a row. The current market price of the company stock is just about Rs13, with a paltry stake in the hands of small shareholders.