A group of funds managed by Ashmore Investment Management Ltd. is planning to hold an initial public offering in June to sell part of their stake in a Pakistani drink packaging manufacturer, Bloomberg reported on Thursday.
This Pakistani company is Pakistan Aluminium Beverage Cans Ltd. (PABC), which is also the manufacturer of Coca-Cola cans in Pakistan.
Ashmore Investment is headquartered in the UK but owns shares in PABC. According to Bloomberg, Ashmore Investment is planning to sell a 26 percent stake in PABC through a first-time share sale in Karachi.
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The CEO of PABC, Azam Sakrani, said that the IPO is expected to raise at least Rs. 3.3 billion ($22 million). This will be the largest IPO in Pakistan since Agha Steel Industries carried out an IPO of Rs. 3.8 billion in September last year, the Bloomberg data showed.
The Director of Investment Banking at Arif Habib Ltd., Syed Saquib Ali, revealed that Ashmore Investment’s remaining 51 percent stake in PABC will be sold through a private placement to local investors, which also includes a current shareholder.
Arif Habib Limited is the sole adviser to the IPO. The plans to hold a public offering come as PABC seeks to expand its operations after becoming a supplier to almost all the manufacturers of PepsiCo Inc. and Coca-Cola Co. products in Pakistan and Afghanistan, Sakrani said.
He remarked that “There is a huge growing demand for cans in Pakistan and the region,” adding that “The phasing out of plastic bottles is also slowly and gradually expanding across the globe, that will benefit cans”.
PABC started operations in 2017 and is the sole manufacturer of aluminum beverage cans in Pakistan, according to its CEO.
PABC’s plant, which is located in an industrial zone of Faisalabad, can manufacture 1,800 cans per minute. Now, it is considering expanding its capacity to as high as a billion cans in annual production from its current potential output of about 600 million cans per year. Sakrani added that the expansion plan also considers the increasing local demand and export prospects of cans.
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PABC caters to almost 50 percent of the Afghan beverage market. It has also supplied printed cans to Tajikistan and America, to clients including PepsiCo. It is currently in discussions with companies in Bangladesh, and also sees potential in Central Asia, Sakrani revealed.
PABC had posted a growth of six percent in revenues last year, amounting to Rs. 5.1 billion, of which 35 percent had come from exports. The net income of the company also grew by four times to clock in at Rs. 611 million, a representative of Arif Habib Limited told Bloomberg.
