Coca-Cola, Pepsi's can-maker’s IPO set to hit market in June

April 23, 2021 (MLN): A group of funds managed by Ashmore Investment Management Ltd is planning to sell part of their stake in drink packaging manufacturer Pakistan Aluminium Beverage Cans Ltd (PABC) in an initial public offering in June, a Bloomberg report said.

To highlight, PABC established in December 2014, is a project of Ashmore investment group UK.

The group is looking to sell a 26% stake in the firm through a first-time share sale in Karachi that could raise at least Rs3.3 billion ($22 million), PABC Chief Executive Officer Azam Sakrani said.

The funds are selling the rest of their 51% holdings in the can-maker through a private placement to local investors that includes a current shareholder, according to Syed Saquib Ali, director of investment banking at Arif Habib Ltd, the sole adviser to the IPO.

Liberty Group Pakistan owns 49% shares of the company, according to PABC’s website.

As per data compiled by Bloomberg, the IPO would be the largest in Pakistan since steelmaker Agha Steel Industries Ltd.’s 3.8 billion rupees offering in September.

The listing comes as the can maker is eyeing potential expansion, wrote Faseeh Mangi, a reporter at Bloomberg.

In a short time, Pakistan Beverages has become a supplier to almost all the manufacturers of PepsiCo Inc. and Coca-Cola Co. products in Pakistan as well as in neighboring Afghanistan, Sakrani said.

‘There is a huge growing demand for cans in Pakistan and the region', Sakrani said in an interview. 'The phasing out of plastic bottles is also slowly and gradually expanding across the globe, that will benefit cans', he said.

The beverage company, which started operations in 2017, is the only manufacturer of aluminium beverage cans in Pakistan, Sakrani said.

PABC’s plant, which is located at M-3 Industrial city Faisalabad, can manufacture 1,800 cans a minute, the report cited.

The company is considering expanding its capacity to as many as one billion cans a year from its current potential output of about 600 million, given rising local demand and export prospects, he said.

‘PABC serves more than 50% of the Afghanistan beverage market and recently agreed to supply another two large companies in the country. They have also supplied printed cans to clients in Tajikistan as well as in the U.S. including PepsiCo this month', he said.

According to Sakrani, the firm is in discussions with companies in Bangladesh and sees potential in Central Asia.

Despite being shut for two months because of the pandemic, the company’s revenue grew by 6% to Rs5.1 billion last year, 35% of which came from exports, Arif Habib’s Ali said. Its net income grew by more than four times to Rs611 million, he added.

Copyright Mettis Link News