Druk Satair Corporation Ltd (DSCL) announced its decision of voluntarily winding up of the business during the 28th AGM on 13/03/2023.
We expected it with various debates on nationalizing minerals and mines in Bhutan.
Royal Securities Exchange of Bhutan Ltd suspended trading of its shares since three years ago.
Jigme Mining Corporation Ltd ended in this manner. Government started 100% state enterprise State Mining Corporation for business of minerals and mines in Bhutan.
Closing of DSCL – How It’ll Be Done
The Companies Act of Bhutan 2016 outlines procedures of winding up of a public company in Bhutan.
There are numerous ways a public company can be dissolved. Like in the case of DSCL, voluntary dissolution is one of them.
The power of the Board and the management will cease with the start of dissolution. The liquidator will be in charge of all.
Menuka Chhetri & Associates, an audit firm based in Thimphu, has been appointed as the liquidator of DSCL.
The liquidator will settle all the receivables and payables of the company by encashing all assets.
An excess of collectables over payables will be given to its shareholders base on exit price.
Closing of DSCL – Possible Impacts
If the company was financially strong prior to winding up of the business, the exit price can be set higher. It’ll reward shareholders.
Jigme Mining Corporation Ltd has set exit price of Nu.583 giving 5,800% profit against face value.
DSCL won’t be able to fix exit price that high. It would be too great even if they can fix half. Look at its financial reports for it.
The liquidation of DSCL marked the end of one last investing opportunity for Bhutanese in mining sector via stock.
Moreover, an immediate impact will be one more less choice of stock for us. Bhutan stock market will be down by about Nu.380M.
Closing of DSCL – Is it Good or Bad
The idea of nationalizing minerals and mines is from the Article 1 (12) of the Constitution of Bhutan.
I don’t hold shares of DSCL. However, in general public’s perspectives its winding up is closure of exposure in mining sector.
When number of companies in our stock exchange is decreasing, stock demand is increasing.
It leads to possible over-valuation of some stocks beyond their intrinsic values. Choice of investing in stock is limited.
What do you think of winding up of DSCL? If you’re its shareholder, will you welcome it?
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