Karachi: Atlas Engineering Limited is considering voluntary delisting from the stock exchanges upon request of its majority shareholder, Shirazi Investments (Pvt). Ltd.
According to Alfalah Securities, the company has claimed that the polices for engineering industry has been unfavourable for its growth while the import of built up cars, trucks, buses, tractors etc has adversely affected the local vending industry. Similarly, smuggling and understated invoicing of parts has made the industry uncompetitive while they have also been over burdened by an increase in sales tax. The locally produced products have become uncompetitive due to penetration of smuggled products and the unorganized engineering units have wiped out the local industry due to non-payment of taxes. The cost of production of the industry has also been hiked due to constant devaluation of Pak Rupee against US dollar and Japanese Yen and an increase in material and utilities prices have put inflationary pressures on the industry as a hike in production cost cannot be passed on to the consumers owing to severe competition from the unorganized sector.
Therefore, the company has decided to delist from the Karachi and Lahore Stock Exchanges as they believe that the company’s profitability would face immense pressure and they would not be able to payout dividends. Atlas Engineering is a highly leveraged company and despite of 100% right share issuance, the net working capital of the company remains negative while the company is also seeking huge capital investment for replacing its old plant and machinery.
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