Lahore: Kohinoor Power Company Limited (KPCL) announced today that it has decided against the previously proposed merger with Saritow Spinning Mills Limited (SSML), attributing the decision to SSML's halted production and current economic conditions. The company also reported significant financial losses for the fiscal year ending June 30, 2024.
In a statement released today, the Boards of Directors of KPCL and SSML detailed their decision to retract approval for the planned amalgamation due to the challenging economic landscape and SSML’s cessation of production as of February 2024. According to information available from the Pakistan Stock Exchange (PSX), the decision was influenced by the realization that the merger's expected benefits are no longer attainable. Both companies expressed gratitude towards their shareholders and confirmed their commitment to exploring other strategic alternatives moving forward.
The financial downturn for KPCL was stark, with the audited results showing a substantial increase in losses. For the year ended June 30, 2024, KPCL posted a loss after taxation of Rs. 15.73 million, a significant increase from the previous year's Rs. 1.70 million. The loss per share also escalated sharply to Rs. 1.25 from Rs. 0.13. This financial year has seen gross profits drop from Rs. 2.24 million in 2023 to Rs. 3.27 million in 2024, amidst rising administrative and other expenses, which collectively surged to over Rs. 20.46 million.
No dividends or bonus shares will be issued as per the board's recommendation, highlighting the company’s strained financial state. The Annual General Meeting is scheduled for October 28, 2024, at Lahore, where further discussions on the company’s future and shareholder concerns will take place. The share transfer books will remain closed from October 22, 2024, to October 28, 2024, to facilitate the preparations for the meeting.
As KPCL navigates through these challenging times, stakeholders are closely monitoring how the company will manage its financial health and strategic direction in the upcoming months.