Bolan Castings Limited, a subsidiary of Millat Tractors Limited, has announced a suspension of its production activities due to a significant drop in customer orders and severe financial difficulties resulting from delayed payments from its primary customers.
According to 24NewsHD TV channel, the development was disclosed in a notice sent to the Pakistan Stock Exchange (PSX) on Friday. The company manufactures and sells casting for tractors and automotive parts.
The notice, issued by Bolan Castings' Company Secretary Arafat Mushir, stated, "Due to a drastic drop in orders from our customers, the Company is facing a drop in sales.
Additionally, delays in payments from our main customer are also causing severe financial strain.
Hence, the management of the Company has decided to halt the production activities of the Company from Monday, August 26, 2024, till further notice."
Bolan Castings Ltd. has requested the PSX to inform the TRE Certificate holders about this material information and has also notified the Securities & Exchange Commission of Pakistan (SECP) regarding the situation.
The company, a public listed entity incorporated in Pakistan on July 15, 1982, under the Companies Act, 1913 (now the Companies Act, 2017), specializes in the manufacturing and sale of castings for tractors and automotive parts.
This announcement follows a similar decision by Millat Tractors Limited (MTL), which on Thursday declared the suspension of its production operations due to unresolved issues related to the Goods and Services Tax (GST) refunds.
MTL, in its notice to the PSX, highlighted that while the GST on tractors is set at 10%, the GST on input raw materials is 18%, leading to a growing accumulation of refund claims.
Despite the company's efforts to seek clarification, the government has yet to establish a mechanism for processing these refunds, compelling Millat Tractors to cease production until further notice.