The Frontier Foundry Steel (Pvt) Ltd. will raise Rs9 billion by selling 25% of its shares through an initial public offering (IPO), said Nauman Wazir, chairman of the company, while talking to Gwadar pro on Friday.
The firm has engaged a financial advisory consortium comprising Habib Bank Ltd., Bank Alfalah, AKD Securities, and Alfalah CLSA Securities to advise it for listing on Pakistan Stock Exchange.
FF Steel is a prominent construction steel manufacturer in the country, with head office in Peshawar, capital of Pakistan’s KP province. It has two units in Lahore, capital of Punjab province, and Peshawar, with a combined production capacity of 1,400 metric tonnes of 60-grade steel rebars per day.
“We will utilise part of the IPO proceeds for construction of our third unit in Karachi to produce 1,200 metric tonnes of 60-grade steel rebars per day”, Nauman said.
“We also plan to develop a special economic zone (SEZ) in the private sector in Karachi, so the rest of the funds will go to this project”, he said.
It will be the biggest ever IPO in the private sector, Nauman claimed. “Our firm has been valued at Rs36 billion, so the 25% shares will translate into Rs 9 billion”, he elaborated. It will also be the first IPO in KP after 16 years, following that of the provincial government-owned Khyber Bank in 2006, he said.
On August 31, Air Link Communication raised Rs6.43 billion in Pakistan’s largest private sector IPO so far to expand its manufacturing facility of four Chinese mobile phone brands. Also, on October 4, Ghani Global announced raising Rs8.5 billion through the IPO of its subsidiary, Ghani Chemicals, to set up two chemical plants in Allama Iqbal Industrial City, a special economic zone (SEZ) under the China-Pakistan Economic Corridor (CPEC) initiative.
Zubair Khan, Director Alhaj Asia Star Steel Co. told Gwadar pro that demand for 60-grade steel rebars had mounted due to large-scale projects, especially hydropower plants and dams, underway in the country under CPEC. As Pakistan’s existing steel manufacturers produce low-grade steel rebars, we will see more expansion in the industry in near future due to the rising demand for high-quality steel for CPEC projects, he said.
Alhaj Asia Star Steel is a joint venture project of Pakistan’s Alhaj Group and China’s Hebei Xingang Iron & Steel Group. The Alhaj Steel unit in Swabi District of KP under the JV can produce 500,000 metric tonnes of steel rebars per annum.
