Kohinoor Power Calls Off Merger with Saritow Spinning Mills

Kohinoor Power Company Limited (KOHP) announced this month that it is no longer pursuing a merger with Saritow Spinning Mills Limited (SSML), citing challenging economic and operational conditions. The company communicated this decision in a notice to the Pakistan Stock Exchange (PSX), signaling a significant shift in its strategic plans.
According to the notice, the Boards of Directors (BoD) of Kohinoor Power and Saritow Spinning Mills convened on September 30, 2024, where they mutually agreed to retract the previously granted approval for the proposed amalgamation of KOHP into SSML. “This decision was not made lightly,” the notice stated. “Both boards are committed to acting in the best interests of their stakeholders and have conducted a thorough review of the current economic landscape.”
In October 2018, the KOHP board had given in-principal approval for the merger, which was expected to create synergies and enhance operational efficiencies between the two companies. However, recent developments have forced a reevaluation of this strategy.
The notice further explained, “This decision follows a thorough assessment of the current economic conditions and the financial status of SSML, which has ceased production as of February 2024. Given these circumstances, it has been concluded that the anticipated benefits of the merger are no longer achievable.”
This development underscores the volatility of the textile sector in Pakistan, which has been grappling with numerous challenges, including fluctuating demand, rising costs, and a global shift in manufacturing trends. Stakeholders will be keenly watching how Kohinoor Power navigates this complex landscape moving forward, as the company seeks to reassess its strategic objectives in light of this decision.
With the merger off the table, KOHP will likely focus on strengthening its core operations and exploring alternative partnerships that align more closely with its current business goals. The decision reflects a cautious yet pragmatic approach as the company aims to safeguard its interests in a rapidly changing economic environment. – ER Report