Lahore: Nishat Mills Ltd. (NML) is set to realign its investment strategy by divesting its stake in Nishat Chunian Ltd. (NCL) and increasing its holdings in Nishat Chunian Power Ltd. (NCPL). This strategic move is slated for approval at an Extraordinary General Meeting (EOGM) on August 17, 2024, aimed at restructuring the group’s shareholding structure.

According to AKD Securities Limited, the restructuring will involve a share swap, where NML will transfer its NCL shares to Shehzad Saleem, CEO of NCL, in exchange for shares in NCPL. The swap ratio has been set at 1.93, with NML receiving approximately 63.1 million NCPL shares in exchange for 32.7 million NCL shares. This transaction will dissolve NML's 14% shareholding in NCL, while boosting its stake in NCPL from 7% to 24%.

The rearrangement will not affect the fundamental business or value of NCPL and NCL but will enhance the value of NML's holdings in NCPL to approximately PKR 2.4 billion, representing 4.0% of its portfolio, up from PKR 1.6 billion or 2.6% of the combined holdings. This strategic realignment is anticipated to have a minimal impact on NML itself, although it leads to a revised target price for NML's shares for June 2025, set at PKR 140 per share.