Lahore December 15 2023: Service Industries Limited decided to demerge its Tyres & Tube Segment and Retail segment of the company, according to company filing to the exchange.
Tyre Division, which is engaged in manufacturing of tyres, tubes and spare parts for automobiles, is the major contributor to revenue stream of the Company.
The Board has made the decision to increase the long-term equity investment in Service Long March Tyres (Private) Limited (SLM) by an amount of up to PKR 1,500,000,000 as needed by SLM.
Service Industries Limited has opted to demerge and transfer the Tyres & Tubes segment of the company, including its manufacturing facilities, relevant assets, operations, and liabilities, to a wholly owned subsidiary to be incorporated, facilitated by a Court Sanctioned Scheme. This is contingent upon the finalization of pertinent documentation and approval of the scheme by both the Company’s Board of Directors and the Court.
Similarly, the Board has resolved to demerge and transfer the Retail segment of the company, along with all associated assets, operations, and liabilities, to another wholly owned subsidiary (to be incorporated) through a Court-sanctioned Scheme. As with the Tyres & Tubes segment, this process is subject to the finalization of relevant documentation and approval by both the Board of Directors and the Court.
The Board has further decided to maintain ownership and operation of the remaining businesses, which include the footwear unit and investments, subsequent to the demerger of the Tyres & Tubes segment and Retail Segment from Service Industries Limited.
Additionally, the Board has made the decision to augment the long-term equity investment in Service Long March Tyres (Private) Limited (SLM), an associated/subsidiary company, by an amount of up to PKR 1,500,000,000 as needed by SLM. This will be accomplished by subscribing, at par, to up to 150,000,000 additional fully paid-up ordinary right shares of PKR 10 each. However, this action is subject to the approval of the members of the Company. Service Long March Tyres (Private) Limited (SLM), subsidiary company of SIL, commenced its operations in March 2022. SLM is the first and only manufacturer of All Steel and Radial Tyres for buses and trucks.
To secure shareholders’ approval, the company will convene an extraordinary general meeting on Wednesday, January 17, 2024, at 10:00 a.m., with the aim of seeking members’ approval for the equity investment in SLM.
