Merger Details and Structure
The Board of Directors at Sapphire Fibres Limited has unanimously approved a "Scheme of Compromises, Arrangement, and Reconstruction" for the amalgamation of RCSML into SFL, as per the provisions outlined under Sections 279 to 283 and Section 285 of the Companies Act, 2017. This legal structure ensures a seamless transition and aligns with the required corporate regulations.
Once the merger is completed, RCSML will be dissolved without undergoing winding-up proceedings, subject to approval from the Sindh High Court.
Shareholders of Reliance Cotton Spinning Mills will receive Sapphire Fibres shares based on a court-certified swap ratio, with Shinewing Hameed Chaudhri & Co. acting as the independent chartered accountants to verify this ratio.
Approval Process and Next Steps
This merger scheme is currently conditional on securing all mandatory permissions and endorsements, including:
Shareholders’ and creditors’ approval.
Regulatory clearances from relevant bodies.
Sanction from the Sindh High Court.
Market Context
On the day of the announcement, Pakistan’s key stock indices reflected a positive sentiment:
KSE100 index surged to 161,220.30, a 1.22% increase.
Other indices such as ALLSHR, KSE30, KMI30, KMIALLSHR, BKTi, and OGTi also showed healthy upticks.
What This Means for Stakeholders
The approval of this merger underscores Sapphire Fibres’ commitment to streamlining operations and expanding market presence within Pakistan’s competitive textile landscape. It promises potential synergies, improved operational efficiencies, and greater value creation for shareholders moving forward
Stay tuned for more updates as the scheme progresses through regulatory and judicial channels, and as both companies work towards a unified future in the textile industry