Lahore: Reliance Cotton Spinning Mills Limited (RCSML) has announced the publication of an Extra Ordinary General Meeting (EOGM) notice and ballot paper, in compliance with regulation 8 of the Companies (Postal Ballot) Regulations, 2018. The notice, published in the "Business Recorder" and "Nai Baat" on March 27, 2025, has also been made available on the company's website. The EOGM aims to inform shareholders of upcoming strategic decisions, including a potential investment in Sapphire Fibres Limited (SFL).
The notice highlighted the availability of the e-voting facility for eligible members as per regulation 4 of the Companies (Postal Ballot) Regulations, 2018. This development ensures that the TRE Certificate Holders of the Exchange are duly informed. According to information available from the Pakistan Stock Exchange (PSX), the investment proposal involves the acquisition of securities worth up to Rs. 1.00 billion, with the exact number of shares to be determined based on the negotiated price at the time of transaction.
Sapphire Fibres Limited, an associated company of RCSML, is a public listed entity focused on the textile composite unit. The company has an authorized capital of Rs. 350.00 million and an issued and paid-up capital of Rs. 206.72 million. RCSML currently holds a 3.86% shareholding in SFL, with plans to adjust its stake depending on the negotiated price at the time of purchase. Post-investment, the expected shareholding is projected to be around 2.42%.
The current market price per SFL share stands at PKR 1,121, with a twelve-week weighted average of PKR 1,449. The break-up value of the intended securities, based on the latest audited financial statements, is Rs. 1,671.90 per share. The investment, intended to yield better returns for RCSML in the long run, will utilize internally generated funds. The directors of RCSML, who are also directors of SFL, have no direct or indirect interest in the transaction except for their shareholding.
Financially, SFL reported a net profit after tax of Rs. 3.37 billion for the fiscal year ending June 30, 2024, with earnings per share of Rs. 163.17 for the year 2024. The associated company's assets include property, plant, and equipment valued at Rs. 16.05 billion and current assets totaling Rs. 29.65 billion. The liabilities include non-current liabilities of Rs. 4.63 billion and current liabilities of Rs. 17.08 billion, with total revenue reported at Rs. 47.42 billion.
The EOGM and potential investment signify RCSML's strategic approach to enhancing shareholder value and exploring growth opportunities within the textile sector, as delineated in the designated market category.