Some mergers and restructurings in Pakistan proceed by a formal scheme of arrangement rather than a straightforward share or asset purchase, particularly where multiple classes of stakeholders are affected.
When a scheme is used
A scheme of arrangement under the Companies Act 2017 is generally used for more complex mergers, demergers or restructurings, particularly where creditor or minority shareholder interests need to be addressed through a court-sanctioned process rather than private agreement alone.
The approval sequence
The process generally involves an application to the relevant court, meetings of the affected classes of members or creditors to approve the scheme, and SECP’s role in reviewing the scheme for compliance with the Companies Act before it is sanctioned.
Why this route is slower but sometimes necessary
A scheme binds all members of the relevant class once approved, including those who did not consent, which is precisely why it requires court sanction and a more structured process than a private transaction between willing parties.
What to do next
Establish early in the transaction planning whether the structure genuinely requires a scheme of arrangement, since this affects both timeline and the approvals that must be sought.