Service Global Footwear Ltd., Pakistan’s largest exporter of footwear, is planning an IPO in the domestic market to raise money to invest in the parent’s joint venture, Bloomberg reported Tuesday.
Service Global Footwear is part of Service Industries Ltd., which employs more than 13,000 people and is known for its footwear and tires in Pakistan.
The shoe division supplies brands such as Zara from Inditex SA, Dockers from Levi Strauss & Co. and Scholl from Reckitt Benckiser Group Plc.
The company has annual sales of approximately $ 44 million and exports to European countries such as Germany, France and Italy. It has a capacity of 3.6 million pairs of shoes per year.
A representative from Service Industries confirmed the details of his unit’s IPO plans. “The company will produce radial tires for trucks and buses in Pakistan for export from a factory near Karachi.
Service Global Footwear plans to use the IPO to acquire approximately 20% of the shares in a joint venture set up by Service Industries and China’s Chaoyang Long March Tyre Company, Shahid Ali Habib, CEO of Arif Habib Ltd. , the sole advisor to Bloomberg, announced the IPO.
At approximately $ 250 million over seven years, this is the largest investment in the country’s tire plant. The first phase will start in August, ”reported Bloomberg.
The Lahore-based shoes making company plans to raise at least 1.6 billion rupees ($ 10 million) by offering 41 million shares at a minimum price of 38 rupees each, Habib said.
“The price could go up to 40%, meaning Service could increase Global Footwear to $ 14 million,” added Habib.
“The company is expected to begin accepting orders from investors as early as March last week.”
“The shoemaker is joining a global cloud to leverage capital markets for funds and relies on strong investor sentiment,” added Bloomberg.
“The 33% rise in Pakistan’s benchmark, the KSE-100 index, last year brought in the first-ever stock market in a record year.”