The board of directors of the Pakistan Stock Exchange (PSX) has decided to form a wholly owned subsidiary, namely PropCo, to decouple real estate from its regular operations, PSX said in a procurement notice.
The decision was made at its meeting on June 29, 2021.
The stock exchange, in a statement released on Wednesday, said: “Following on from PSX’s earlier announcements dated February 23, 2018 and August 28, 2019, regarding the approval in principle of the PSX board of directors regarding the proposed split of the real estate of PSX. of its operations, the Board decided to form a wholly owned subsidiary of PSX for the purposes of the spin-off, instead of creating a sister company owned by the shareholders of PSX.
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In 2018, PSX’s board of directors approved the concept of demerging real estate from its operations which would result in the creation of a separate entity, whose shares would be issued to existing shareholders of the Exchange. The board of directors then mandated management to engage the services of investment bankers and legal advisers to advise them in the process.
“Accordingly, the real estate of PSX and related arrangements will be transferred to a wholly owned subsidiary (PropCo) against the issuance of shares of PropCo to PSX through a plan of arrangement under the relevant provisions of the Companies Act 2017 “, he added.