LAHORE: Pakistan’s largest footwear exporter, Service Global Footwear Limited (SGFL), organized an IPO briefing here in Lahore on 24th March 2021 to apprise the investors about the IPO transaction. The company is offering shares to investors to raise funds that will be used to invest in a new joint international business venture.

According to Shahid Ali Habib, Chief Executive Officer at Arif Habib Ltd., the sole designated advisor to IPO, SGFL is aiming to sell 41 million shares at a floor price of Rs 38 per share that can be boosted up to 40 percent to increase the funds. SGFL plans to raise Rs 1.6 billion that can be increased with expected boost in the price per share.

SGFL is wholly owned subsidiary of Service Industries Ltd, which is well renowned for its tyres and shoes business. SGFL is the largest footwear exporter of Pakistan, supplying products to European countries mainly Germany and Italy. SGFL sells around 3 million pairs of shoes annually to international brands including Zara, Dockers and Scholl etc., generating an annual revenue of more than US $40 million.

According to Habib, SGFL plans to use the IPO proceeds to buy approximately 19 percent stake in Service Long March Tyres (Private) Limited (SLM), which is a joint venture between the parent company Service Industries Limited and a China’s tyre manufacturing and exporting giant Chaoyang Long March Tyre Co. Ltd. This new company, SLM will manufacture truck and bus radial tyres in Pakistan, primarily for exports.

The total project cost is estimated at $250 million, which is the largest amount to be invested in Pakistan in tyre manufacturing, spanning over a period of seven years, with first phase starting in August 2021.—PR

Copyright Business Recorder, 2021