Suhail Jute Mills Limited Reports on Operational and Financial Challenges

Karachi, Suhail Jute Mills Limited presented a detailed progress report for the quarter ended December 31, focusing on the operational and financial challenges faced by the company. The report, required under the Listed Companies (Buy-Back of Shares) Regulations, 2019, highlighted several key developments and plans.

One of the significant issues addressed in the report was the continued impact of the COVID-19 pandemic on the company’s operations. Suhail Jute Mills Limited has maintained its machinery in running order, anticipating revenue generation once working capital becomes available. However, the report noted that there had been no meaningful progress in commercial operations due to financial constraints and the need for working capital.

The company had previously developed a plan involving the conversion of existing land into smaller industrial plots. This plan proposed the outright sale of 20 acres of land for approximately Rs 480 million, with the proceeds aimed at converting 576 kanals of land into industrial plots of various sizes. This process, estimated to generate approximately Rs 2.5 billion over three years, is intended to provide the necessary funds for the company’s revival.

Despite this plan, the report stated that investors are hesitant to make long-term commitments involving large amounts of financial resources, particularly in the current economic and political climate in Khyber-Pakhtunkhwa. The uncertainty has hindered the company’s ability to secure funding for working capital and discharge outstanding obligations to creditors.

The principal sponsors of Suhail Jute Mills Limited have continued to financially support the company, as evident from their additional funds injection during the reported period. This support underscores the sponsors’ commitment to reviving the company’s operations and recouping their investment for the benefit of all stakeholders.

The report concluded by acknowledging the approval of the plan by the Securities and Exchange Commission of Pakistan (SECP) and the conclusion of proceedings against the company initiated under Section 304 of the Companies Act 2017.