KARACHI: Samin Textiles Limited (SMTL) has agreed to acquire the home appliances business of Waves Singer Pakistan Limited (WSPL), as the troubled textile company plans to switch its principal line of business from textiles to home appliances and light engineering. Directors’ of both companies have approved this scheme of arrangement.
According to the proposed deal, the home appliances business of Waves Singer would be demerged and amalgamated into Samin Textiles, which would become a manufacturer, assembler and wholesaler of home appliances and other light engineering products. The name of Samin Textiles will be changed to Waves Home Appliances Limited.
The consideration, which Samin Textiles has agreed to pay includes Rs2 billion in cash and 256 million Samin Textile shares to Waves Singer Pakistan’s directors and shareholders. The cash component will be paid over a period of two years. Samin Textiles was trading at Rs10.59 on Thursday.
Samin Textiles posted a net profit of Rs1.087 million for the quarter ended September 30, 2021, compared with a loss of Rs4.78 million in the same period last year.
“The management team is holistically working towards full-scale implementation of its business plan for trading activities and is also developing new channels such as wholesale, e-commerce and business-to-business (B2B) to increase its sales,” the company noted in its last financial report.
“Due to [a ]change in [the] lifestyle and rapid urbanisation, [the] overall growth in business and improvement of economic climate will also take place and [the] company will take appropriate steps to achieve a substantial footprint in the market.”
“The management is confident that it will achieve viable and sustainable growth to support its operations.”
Haroon Ahmed Khan, chief executive officer (CEO) of Waves Singer Pakistan, in April bought the bankrupt Samin Textiles to turn it around into a large retail company with a strong e-commerce platform through an initial injection of Rs250 million.
According to a bourse filing by Samin Textiles in April this year, the company, which was shut down in August 2018, had requested the Pakistan Stock Exchange (PSX) to help it get its shares unfrozen by the Central Depository Company (CDC) for their transfer to Khan, who also owns more than 38 per cent holding in WSPL, for the execution of the company’s revival plan.
The appliances manufacturing plant of WSPL is being moved to a new purpose‐built larger factory for which the land had already been purchased and the construction is already in progress.
The construction and relocation of the factory is expected to be completed during FY22 in phases.
Moreover, WSPL plans to develop a real estate apartment project, keeping in mind the prime location and the government’s support for the construction activity. This project would be developed at the space to be vacated with the shifting of manufacturing facilities.
Master plans for the same have been developed from two leading architectural firms. Accordingly, lead architect, structure consultant and MEP Consultant have also been hired to fast‐track the project.
