Nike Sock Supplier Plans Biggest Pakistan Private Sector IPO - EcoFinBiz Blog

Blue Host

Nike Sock Supplier Plans Biggest Pakistan Private Sector IPO

The Smarter way to get your business news - Subscribe to BloombergQuint on WhatsApp

(Bloomberg) -- Interloop Ltd., which makes socks for Nike and Adidas, is planning Pakistan’s biggest ever initial public offering by a private firm.

The company plans to raise as much as 6.8 billion rupees ($51 million) to expand its sock manufacturing capacity by around 20 percent and enter the denim business, said Chairman and Co-Founder Musadaq Zulqarnain. It will offer 12.5 percent of the business in the sale, likely to take place in January, and is aiming to lift revenue by 77 percent over five years, he said.

“Our capacity is already full,” Zulqarnain said in an interview at the company’s head office in Faisalabad. Interloop can see more growth, so will “take that risk” to expand, he said.

The listing comes as Prime Minister Imran Khan tries to spark an export revival to make up ground that Pakistan has lost to low-cost manufacturing destinations like Vietnam and Bangladesh. The new government has announced plans to cut gas and electricity prices to support companies selling abroad, although the push has been criticized for relying too much on subsidies.

Imran Khan’s Answer to Pakistan’s Ailing Exports: More Subsidies

The Interloop offer will surpass the previous record for a private company, when Pakistan Stock Exchange Ltd. raised 4.5 billion rupees two years ago. There have been larger sales by state-controlled companies in Pakistan.

Interloop was founded in the early 1990s by Zulqarnain and his brother, Chief Executive Officer Navid Fazil. The company now employs around 16,000 people and makes more than half a billion pairs of socks a year. Revenue for the 12 months through June was 31 billion rupees, according to Zulqarnain.

The sale consists of 109 million shares that will be offered at a floor price of 45 rupees a share with a maximum price band of up to 40 percent, according to Shahid Ali Habib, chief executive officer at Karachi-based Arif Habib Ltd., the financial adviser to the transaction.

“They are one of the most well-managed companies in Pakistan, so they should not have a problem with demand,” said Amjad Waheed, chief executive officer at NBP Fund Management Ltd. in Karachi. “Investors are sitting with cash on the sidelines after the market drop over the past year.”

To contact the reporter on this story: Faseeh Mangi in Karachi at fmangi@bloomberg.net

To contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net, Andrew Janes, Chris Kay

©2018 Bloomberg L.P.

. Read more on Business News by BloombergQuint.

No comments


Theme images by merrymoonmary. Powered by Blogger.