Ashmore Funds to Sell Pakistan Coca-Cola Can Maker Stake Via IPO

(Bloomberg) -- A group of funds managed by Ashmore Investment Management Ltd. are planning to sell part of their stake in drink packaging manufacturer Pakistan Aluminium Beverage Cans Ltd. in an initial public offering in June.

The U.K.-based asset manager’s funds are looking to sell a 26% stake in the firm through a first-time share sale in Karachi that could raise at least 3.3 billion Pakistani rupees ($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 owns 49% of the company, according to PABC’s website.

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

Ashmore did not immediately respond to an emailed request for comment sent outside of regular business hours.

The listing comes as the can maker is eyeing potential expansion. In a short time, PABC 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 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.”

The beverage company, which started operations in 2017, is the only manufacturer of aluminum beverage cans in Pakistan, Sakrani said. PABC’s plant, which is located in an industrial zone of Faisalabad, can manufacture 1,800 cans a minute. 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, he said. They have also supplied printed cans to clients in Tajikistan as well as in the U.S. including PepsiCo this month, he said. The firm is in discussions with companies in Bangladesh and sees potential in Central Asia, he added.

Despite being shut for two months because of the pandemic, the company’s revenue grew by 6% to 5.1 billion Pakistani rupees last year, 35% of which came from exports, Arif Habib’s Ali said. Its net income grew by more than four times to 611 million rupees, he said.

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