Zahur Cotton Mills Limited Aims to Resolve Suspension with Merger and Operations Revival

Karachi: Zahur Cotton Mills Limited (ZHCM) is diligently working towards reviving its operations and merging with an IT company to comply with Pakistan Stock Exchange regulations, after the continued suspension of its shares.

On 11 July 2024, the Pakistan Stock Exchange (PSX) extended the suspension of ZHCM’s trading activities for an additional 60 days due to non-compliance with clause 5.11.1.(b)(f), which includes the suspension of principal business operations and failure to induct ordinary shares into the Central Depository Company (CDC). According to information available from the Pakistan Stock Exchange (PSX), ZHCM has been proactive in addressing these issues to restart its operations and fulfill the regulatory requirements.

ZHCM has made notable progress in its merger with an IT company, a strategic move intended to revitalize its business model. The merger scheme received approval from its Board of Directors and was subsequently filed with the Lahore High Court. Following the court’s initial approval, an Extra Ordinary General Meeting (EOGM) was convened on 27 March, where shareholders overwhelmingly supported the merger plan.

Further judicial reviews took place on 11 June, with the second hearing resulting in the court advising ZHCM to address comments from the Securities and Exchange Commission of Pakistan (SECP) regarding the merger. The next hearing is scheduled for 5 September 2024, where ZHCM aims to present its responses to SECP’s feedback and secure approval from the Competition Commission of Pakistan.

Once the merger is officially sanctioned by the court, the IT company’s operations will integrate with ZHCM, expected to yield profitable outcomes for its shareholders. ZHCM remains committed to addressing the suspension causes promptly and has plans to request the reactivation of its shares on the PSX upon resolution of the issues.