Service Global plans IPO

KARACHI: 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, Bloomberg reported on Tuesday.

The Lahore-based company plans to raise at least Rs1.6 billion rupees 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 percent, 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.

Service Global Footwear plans to use the IPO proceeds to buy about 20 percent 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.