Zara Supplier Service Global Plans $10 Million Pakistan IPO

[TheSnakeEatingMarkhur]

Zara Supplier Service Global Plans $10 Million Pakistan IPO
By
Faseeh Mangi
15 March 2021, 19:01 GMTUpdated on 16 March 2021, 07:24 GMT

• The company plans to offer 41 million shares as soon as March
• Service Global to invest proceeds in parent’s tire venture

Service Global Footwear Ltd., Pakistan’s largest shoe exporter, is planning an initial public offering in the domestic market to raise funds to invest in its parent’s tire joint venture.


The Lahore-based company plans to raise at least 1.6 billion rupees ($10 million) by offering 41 million shares at a floor price of 38 rupees each, according to Shahid Ali Habib, chief executive officer at Arif Habib Ltd., the sole adviser to the IPO. The price could be boosted by as much as 40%, meaning Service Global Footwear could raise as much as $14 million, Habib said. The company is scheduled to start taking investor orders as soon as the last week of March, he added.


Service Global Footwear is part of Service Industries Ltd., which has more than 13,000 employees and is known for its shoes and tires in Pakistan. The footwear unit supplies brands including Inditex SA’s Zara, Levi Strauss & Co.’s Dockers and Reckitt Benckiser Group Plc’s Scholl. The business has an annual revenue of about $44 million and exports to European countries such as Germany, France and Italy. It has a capacity to produce 3.6 million pairs of shoes annually.



A representative for the parent confirmed the details of the unit’s IPO plans.


Service Industries rose as much as 6.4% to a record 985 rupees in Karachi trading as of 12:15 p.m. local time.


The shoemaker is joining a global rush to tap capital markets for funds, riding on strong investor sentiment. Pakistan’s benchmark KSE-100 Index’s 33% gain in the past year has encouraged the country’s first-time share market, which is seen as heading for a record year.
Busy Times
Pakistan's initial public offerings forecast rising to record high

Source: Arif Habib Ltd. including 2021 forecast from October
* NOTE: Pakistan's fiscal year runs July-June
Service Global Footwear plans to use the IPO proceeds to buy about 20% stake in a joint venture set up by Service Industries and China’s Chaoyang Long March Tyre Co., Habib said. The business will manufacture truck and bus radial tires in Pakistan for export from a factory near Karachi. At a cost of about $250 million over seven years, it’s the largest investment in a tire manufacturing plant in the country. The first phase will start operations in August.

(Updates with parent’s share price in fifth paragraph.)

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[ghazi52]

Service Global Footwear Ltd. planning IPO to raise $10 million for joint investment

• Pakistan's largest shoe exporter, Service Global Footwear Ltd., has planned an initial public offering (IPO) to raise funds from the domestic market to invest in the parent company's tire joint-venture.
• Service Global Footwear plans to use the IPO proceeds to buy about 20% stake in a joint venture set up by Service Industries and China’s Chaoyang Long March Tyre Co.

BR Web Desk
Updated 17 Mar 2021

Pakistan's largest shoe exporter, Service Global Footwear Ltd., has planned an initial public offering (IPO) to raise funds from the domestic market to invest in the parent company's tire joint-venture.


According to Shahid Ali Habib, Chief Executive Officer at Arif Habib Ltd. and the only designated adviser to the IPO, the Lahore-based company aims to raise an estimated 1.6 billion rupees (or $10 million), offering 41 million shares at an introductory price of 38 rupees per share.

Habib added that the price could be boosted by as much as 40%, allowing Service Global Footwear to raise approximately $14 million, with the company scheduled to take investor orders as soon as the last week of March.

Service Global Footwear is a part of Service Industries Ltd., which employs more than 13,000 people, and is reputed for its shoes and tires in Pakistan.

The footwear unit supplies to brands including Zara, Dockers and Scholl. The business generates an annual revenue of about $44 million, with the capacity to produce up to 3.6 million pairs of shoes annually, exporting to European countries including Germany, France and Italy.

The Service Industries share grew by as much as 6.4% to a record 985 rupees.

The shoemaking company is part of the global rush to tap capital markets for funds, riding on positive investor sentiment, with Pakistan’s KSE-100 Index growing by 33% in the past year.
According to Habib, Service Global Footwear aims to use the proceeds generated from this IPO to buy a 20% stake in a joint-venture set up by Service Industries and China’s Chaoyang Long March Tyre Co..

The partnership will manufacture truck and bus radial tires in Pakistan for export purposes, from a factory near Karachi at a cost of about $250 million over a period of seven years - making it the largest investment in a tire manufacturing plant in the country, with the first phase of operations to start in August.