Singer Pakistan Limited and Cool Industries Limited – the makers of Waves brand of home appliances – and Link Well Limtied have agreed to merge their operations and business through share swap ratio.
The manufacturers of home appliances will be merged to form one company under the brand name of Waves Singer Pakistan Limited.
In this regard, the board of directors approved the draft of the scheme. The merger scheme is subject to the approval of the stakeholders, creditors, regulator, shareholders and Sindh High Court.
According to the stock filing, Cool Industries Private (Ltd) shall be merged in Singer Pakistan Limited. According to the deal, 93.975 million shares of Singer are to be issued to the shareholders of Cool Industries Ltd. The shares transactions will be based on the swap ratio of approximately 1.79 shares of the Singer Pakistan Limited for every one share of Cool Industries Ltd.
Besides, Link Well Private Ltd, another maker of home appliances, shall be merged with the Singer Pakistan Limited. Accordingly, 2.475 million shares of Singer Pakistan Limited are to be issued to the stakeholders of Link Well Ltd. Singer Pakistan’s 0.33 share is swap for every 1 share of Link Well Limited.
With merger of three companies, the size of the Singer Pakistan Limited will increase manifold. However, the company will restructure its corporate strategy design with the demerger of the retail business from its overall operations and businesses to form a separate wholly owned subsidiary, Electronics Marketing Company Private Limited which shall issue 24.8 million shares in favor of Singer Pakistan and the name of the company will be changed to Waves Singer Pakistan Limited.
Accordingly, Singer Pakistan, Cool Industries and Link Well Limited’s merger will make a new merged company, Waves Singer Pakistan, without the subsidiaries.
These manufacturers produce home appliances such as refrigerators, air conditioners, washing machines, microwave ovens, deep freezers etc,.
The merger of the three companies to form one is likely to have a positive impact on the industry which is getting competitive at the retail level due to increasing penetration of local and multinational brands and imported home appliances in the country.
The new company, Waves Singer Pakistan is likely to receive an edge over its competitors in the local market with consolidated synergies of three companies and their presences in the local market especially through availability of their outlets, dealers and services centers.
If the merger plan performs well, it will benefit investors and shareholders of the company in the future.
Among these companies, Singer Pakistan Limited is the listed company with Pakistan Stock Exchange. The company received offers from private investors for acquisition of shares last year. Accordingly, Pseidon Synergies acquired 18.74 %, Haroon Ahmad Khan bought 15.42% and Nigat Haroon Khan purchased 6.39% shares of the company to be the company’s major stakeholders.
The financial performance of Singer Pakistan Limited has been tremendous for the past one hand half years backed by its increasing sales of home appliances and improve market and operational strategy.
The company made a profit of Rs. 95.3 million by the end of 2016 as compared with losses of Rs. 150 million reported in 2015. The company’s profit surged substantially to Rs. 396 million merely in the first half of 2017.