KARACHI:
The Karachi Stock Exchange (KSE) has accepted the request of ‘Dreamworld Limited’ for its delisting from the exchange, a statement by the KSE said on Monday.
The decision came after the sponsors of the company bought back shares from the general public in what constitutes the current year’s third delisting from the KSE.
Dreamworld was incorporated as a public limited company in 1994 and operates an amusement project on the Super Highway near Karachi.
According to KSE Deputy General Manager Muhammad Ghufran, the company will stand delisted from the KSE with effect from September 17.
Earlier, Sind Fine Textile Mills and National Asset Leasing Corporation were delisted in May and July, respectively. In contrast, six new listings, excluding the second issue of Habib Bank, have taken place on the KSE so far in 2015.
Eight companies were delisted from the KSE in 2014 while the number of delisted companies in 2013, 2012 and 2011 was 15, 68 and seven, respectively.
KSE rules require that the proposal for the voluntary delisting of a company should be approved in its general meeting by not less than three-quarters of the shareholders present either in person or by proxy.
In its extraordinary general meeting held on April 24, shareholders of Dreamworld had unanimously passed a special resolution authorising the company sponsors to purchase 7,857 ordinary shares (other than those held by majority shareholders and their relatives) at Rs325.32 for its delisting from the KSE.
According to KSE regulations, the final purchase price for a delisting is fixed with the approval of the exchange. The exchange also determines the minimum percentage of shares that must be purchased by the sponsors in order to qualify for the delisting.
In its letter to the company on March 26, the KSE had informed the company that the delisting would materialise if it managed to purchase at least 2,000 shares out of the total 7,857 shares owned by stockholders other than the sponsors.
Speaking to The Express Tribune, Taurus Securities Research Analyst Hasan Azhar said most investors prefer to sell their stocks once a company announces a buy-back of shares under a delisting scheme.
Delisting takes place after the sponsors purchase the minimum percentage of shares prescribed by the exchange even if a minority shareholder decides to hold on to his stake in the company, Azhar said.
Such minority investors cannot trade their shares in the stock market after the delisting, although they receive dividends if and when the company announces a pay-out, Azhar added.
Published in The Express Tribune, August 18th, 2015.
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