Exclusive: PC Hotels may be split under proposed settlement in Pakistan Services ownership battle

Pakistan Services Limited (PSL), the listed company that owns and operates the Pearl-Continental hotel chain, could see five of its hotel properties divided between Thatta Cement, which is said to have links with a powerful political family, and Fauji Foundation under a proposed settlement, according to sources familiar with the matter.

Sources say the parties have signed a memorandum of understanding for a proposed out-of-court settlement following more than a year of legal disputes over a roughly 56% voting stake in PSL.

Under the proposed arrangement, PC Karachi and PC Rawalpindiwould be transferred to Thatta Cement, while PC Lahore, PC Bhurban and PC Muzaffarabad would go to Fauji Foundation. The settlement has not yet been formally announced, and the proposed transfers have not been confirmed as completed.

What is happening to Pakistan Services Limited?

PSL has been at the center of an ownership dispute since mid-2025.

Hashwani Group, which acquired PSL in 1985, challenged transactions that left AKD Group Holdings and leading stockbroker Dawood Jan Muhammad with combined holdings of nearly 56% of the company’s voting shares.

The dispute later expanded to include Thatta Cement, which acquired a roughly 28% holding in PSL and sought fresh elections for the company’s board.

How did investors acquire a 56% stake in PSL?

On July 14, 2025, AKD Group Holdings and its subsidiary AKD Securities acquired 9,089,651 PSL voting shares at PKR 700 each, giving the group a 27.95% stake.

PSL was trading at about PKR 782 per share at the time.

A day later, Muhammad acquired another 9,107,800 voting shares, also at PKR 700 per share, giving him a roughly 28% stake.

Together, the two holdings amounted to almost 56% of PSL’s voting shares.

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Hashoo Group later described the development as a “hostile takeover.”

Separately, Murtaza Hashwani had required around PKR 3.638 billion in financing, with 5.2 million PSL shares pledged as collateral under a Share Repurchase Agreement.

Hashwani Group maintained that those shares had been provided only as security and could not be sold or transferred to a third party.

The precise relationship between those 5.2 million collateral shares and the roughly 18.2 million shares later acquired by AKD and Muhammad is not established by the information available.

How did Thatta Cement enter the dispute?

On October 14, 2025, Thatta Cement acquired a roughly 28% stake in PSL.

After becoming a substantial shareholder, the company sought an Extraordinary General Meeting to hold fresh elections for PSL’s board of directors.

Sadruddin and Murtaza Hashwani challenged the process before the Islamabad High Court, alleging that the disputed share transactions were illegal and fraudulent and violated the Companies Act 2017 and Securities Act 2015.

The Hashwani side also maintained that an agreement for the sale of shares had been reached with Fauji Foundation, while its arrangements with AKD Holdings and other parties concerned financing.

Why did the Islamabad High Court intervene?

The IHC suspended the proposed EOGM and board elections, which had been expected in January 2026.

The court also restrained any further sale or transfer of the disputed 56% shareholding and barred Thatta Cement and the new shareholders from interfering in PSL’s day-to-day management.

Hashwani Group also sent legal notices to the Securities and Exchange Commission of Pakistan and the Pakistan Stock Exchange, questioning why regulators had not prevented the disputed transactions.

What could the proposed settlement mean for PC Hotels?

According to sources, the proposed settlement would divide five PC properties between Thatta Cement and Fauji Foundation.

PC Karachi, PC Rawalpindi and PC Muzaffarabad would go to Thatta Cement, while PC Lahore, PC Bhurban and PC Mirpur would go to Fauji Foundation.

PC Peshawar is not part of the dispute, having already been sold separately to Serena Hotels.

PSL’s share price has fluctuated sharply during the dispute, falling from a 52-week high of PKR 1,635 to PKR 799 before recovering to around PKR 830.

Whether and when the proposed settlement will be formally announced remains unclear.