Onsiidated PAKISTAN ALUMINIUM BEVERAGE CANS LIMITED …

Onsi idate d

PAKISTAN ALUMINIUM BEVERAGE CANS LIMITED OFFER FOR SALE DOCUMENT (“OFSD”)

Date and place of incorporation: 4th December 2014, Islamabad Incorporation number: 0090925 Registered and Corporate Office: PHA Flat No. 04, Block No. 12, G-8 / 4, Islamabad, Pakistan Contact No: (+92)-41-8731364 Website: http://pkbevcan.com/ Email: [email protected] Contact person: Adnan Shaikh (Chief Financial Officer & Company Secretary); Phone: (+92)-41-8731364; Email: [email protected]

THIS IS NOT A PROSPECTUS BY PAKISTAN ALUMINIUM BEVERAGE CANS LIMITED (THE “COMPANY”) BUT AN OFFER FOR SALE DOCUMENT BY ASHMORE MAURITIUS PABC LIMITED (THE “OFFEROR”) FOR OFFER FOR SALE (“OFS”) OF SHARES HELD IN THE COMPANY.

This Offer consists of 93,888,000 Ordinary Shares which is 26% of the paid up capital of Pakistan Aluminium Beverage Cans Limited of face value of PKR 10/- each offered by Ashmore Mauritius PABC Limited as an Offer for Sale. The entire Offer will be through Book Building at a Floor Price of PKR 35/- per share (including premium of PKR 25/- per share) with a maximum Price Band of up to 40%. (Justification of premium is given under the “Valuation Section” in paragraph 4A) The Bidders shall be allowed to place Bids for hundred percent (100%) of the Offer size and the Strike Price shall be the price at which the hundred percent (100%) of the Offer is subscribed. However, the successful Bidders shall be provisionally allotted only seventy-five percent (75%) of the Offer size i.e. 70,416,000 shares and the remaining twenty-five percent (25%) i.e. 23,472,000 shares shall be offered to the retail investors. In case retail portion of the Offer remains unsubscribed, the unsubscribed shares will be allotted to the successful Bidders on a pro rata basis.

In addition to this Offer for Sale, the Offeror has also signed agreements to sell 18,052,974 shares i.e. 5% of the paid up capital of the Company at a price of PKR 30.80 per share to Mrs. Hamida Salim Mukaty and 72,221,651 shares i.e. 20% of the paid up capital of the Company to Soorty Enterprises (Private) Limited at a price not less than PKR 31.85 per share by way of Private Placement. Subsequent to the Private Placement and this Offer, the Offeror will not hold any shares in the Company. The transfer of Private placement shares will be done in line with transfer of OFS shares. Details are disclosed in Section 3 (A) 1. As per the Public Offering Regulations, 2017 and PSX’s Listing of Companies and Securities Regulations, the Draft Offer for Sale Document was placed on PSX’s website for seeking public comments starting from April 23, 2021 to May 3, 2021. The comments received have been duly incorporated / responded by the Lead Manager.

REGISTRATION OF ELIGIBLE INVESTORS: The registration of eligible investors will commence at 9:00am on 17th June 2021 and will close at 3:00

pm on 23rd June 2021 BIDDING PERIOD DATES: From 22nd June 2021 to 23rd June 2021 (From: 9:00 am to 5:00 pm)

DATE OF PUBLIC SUBSCRIPTION: From 29th June 2021 to 30th June 2021 (both days inclusive) From: 9:00 am to 5:00 pm

Lead Manager & Book Runner

Book Building Portion will be credit underwritten by

Banker to the Book Building Portion of the Offer: Faysal Bank Limited Bankers for the Retail Portion of the Offer:

Allied Bank Limited Askari Bank Limited Bank Alfalah Limited Habib Bank Limited

Faysal Bank Limited Habib Metropolitan Bank Limited Meezan Bank Limited

For retail portion, investors can submit application(s) through both electronic and physical mode. Electronic/online applications can be submitted

through PSX’s e-IPO system (PES) and Centralized E-IPO system (CES) of Central Depository Company of Pakistan Limited (CDC) PES and CES can

be accessed via web link https://eipo.psx.com.pk, www.cdceipo.com. Tutorial for PES can be found on the at eipo.psxpk/EIPO/home/index For

details please refer to section 13.1.4 of the complete Offer for Sale Document.

Date of Publication of this Offer for Sale Document: 14th June 2021

Name of Securities Exchange: The Company is proposed to be listed at the Pakistan Stock Exchange Limited.

Offer For Sale Document, Bidding Form and Subscription Form can be downloaded from the following websites: pkbevcan.com, www.arifhabibltd.com, www.psx.com.pk & www.cdceipo.com

For further queries you may contact

Pakistan Aluminium Beverage Cans Limited: Adnan Shaikh (CFO); Phone: (+92)-41-8731364; Email: [email protected]

Muhammad Shehroze (DM Finance); Phone: (+92)-41-8731364; Email: [email protected]

Arif Habib Limited: Mr. Daniyal Ahmed Khan (Associate-Invesment Banking); Phone: 021-38899223; Email: [email protected];

Mr. Muhammad Ali Raza (Associate-Investment Banking); Phone: 021-32460741; Email: [email protected]

ADVICE FOR INVESTORS INVESTORS ARE STRONGLY ADVISED IN THEIR OWN INTEREST TO CAREFULLY READ THE CONTENTS OF THIS OFFER FOR SALE DOCUMENT, ESPECIALLY THE RISK FACTORS GIVEN AT SECTION 5.0

BEFORE MAKING ANY INVESTMENT DECISION.

SUBMISSION OF FALSE AND FICTITOUS APPLICATIONS IS PROHIBITED AND SUCH APPLICATIONS’ MONEY MAY BE FORFEITED UNDER SECTION 87(8) OF THE SECURITIES ACT, 2015.

INVESTMENT IN EQUITY SECURITIES INVOLVES A DEGREE OF RISK AND INVESTORS SHOULD NOT INVEST ANY FUNDS IN THIS OFFER UNLESS THEY CAN AFFORD TO TAKE THE RISK OF LOSING THEIR INVESTMENT. INVESTORS ARE ADVISED TO READ THE RISK FACTORS CAREFULLY BEFORE TAKING AN INVESTMENT DECISION IN THIS OFFERING. FOR TAKING AN INVESTMENT DECISION, INVESTORS

MUST RELY ON THE EXAMINATION OF THE COMPANY AND THE OFFER INCLUDING THE RISKS INVOLVED AS DISCLOSED AT SECTION 5.0 OF THE OFFER FOR SALE DOCUMENT.

ADVICE FOR INSTITUTIONAL INVESTORS AND HIGH NET WORTH INDIVIDUAL INVESTORS

SUBMISSION OF MULTIPLE BID AND CONSOLIDATED BID IS PROHIBITED AS PER PUBLIC OFFERING REGULSTIONS, 2017. PLEASE NOTE THAT A SUPPLEMENT TO THE OFFER FOR SALE DOCUMENT SHALL BE PUBLISHED WITHIN THREE WORKING DAYS OF THE CLOSING OF THE BIDDING PERIOD WHICH SHALL CONTAIN INFORMATION RELATING TO THE STRIKE PRICE, THE OFFER PRICE, COMMITMENT BY

THE SUCCESSFUL BIDDERS FOR SUBSCRIBING THE UNDERSUBSCRIBED RETAIL PORTION IN CASE OF HUNDRED PERCENT BOOK BUILDING, CATEGORY WISE BREAKUP OF THE SUCCESSFUL BIDDERS ALONG WITH NUMBER OF SHARES ALLOCATED TO THEM, DATES OF PUBLIC SUBSCRIPTION AND SUCH OTHER INFORMATION AS SPECIFIED BY THE COMMISSION.

http://www.cdceipo.com/

Offer for Sale Document | Pakistan Aluminium Beverage Cans Limited

Page 1 of 138

RISK DISCLOSURES:

a. Restrictive covenant has been placed by financial institutions and the same may result in payment in

non-payment of dividend to shareholders. For details please refer section 6B.

b. There is a supplier concentration risk, as the Company is procuring its main raw material i.e aluminium

coil majorly from Novelis, a South Korean Company. Any supply disruption or cancellation of

agreement with Novelis may affect supply chain and profitability of the Company.

c. There is a customer concentration risk as Pepsi Co. and Coca Cola. bottlers in Pakistan and Afghanistan

region accounts for more than 83% of the sales volume in CY20. Cancellation of agreement with said

players may impact the revenue and profitability of the Company.

d. Sales to Afghanistan accounts to c. 35.2% of total sales of CY20. Any law and order situation in

Afghanistan may impact the revenue of the Company.

e. Any change in pricing of raw material by Novelis, being key supplier of of aluminium coils, might

adversely impact the margins and profitability of the Company.

f. GoP has imposed regulatory duties of c. 40% on import of finished cans. Withdrawal of regulatory

duties or reduction in regulatory duties might make the local can manufacturing business

uncompetitive. For details regarding regulatory duties, please refer to the Section 3.22 of the OFSD.

g. PABC has reported negative cash flow from operating activities for CY18, (PKR 1,560 Million) and FY19

(PKR 76 Million), however during the year CY20 the operating cash flow turned positive to the tune of

PKR 705 Million.


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UNDERTAKING BY THE CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER

25th March 2021

WE AZAM SAKRANI, THE CHIEF EXECUTIVE OFFICER AND ADNAN SHAIKH, THE CHIEF FINANCIAL OFFICER OF PAKISTAN ALUMINIUM BEVERAGE CANS LIMITED CERTIFY THAT:

1. THIS OFFER FOR SALE DOCUMENT CONTAINS ALL INFORMATION WITH REGARD TO THE COMPANY, OFFEROR AND THE OFFER, WHICH IS MATERIAL IN THE CONTEXT OF THE OFFER AND NOTHING HAS BEEN CONCEALED IN THIS RESPECT;

2. THE INFORMATION CONTAINED IN THIS OFFER FOR SALE DOCUMENT IS TRUE AND CORRECT TO THE BEST OF OUR KNOWLEDGE AND BELIEF;

3. THE OPINIONS AND INTENTIONS EXPRESSED THEREIN ARE HONESTLY HELD;

4. THERE ARE NO OTHER FACTS, THE OMISSION OF WHICH MAKES THIS OFFER FOR SALE DOCUMENT AS A WHOLE OR ANY PART THEREOF MISLEADING; AND

5. ALL REQUIREMENTS OF THE SECURITIES ACT, 2015; THE DISCLOSURES IN PUBLIC OFFERING REGULATIONS, 2017 FOR PREPARATION OF OFFER FOR SALE DOCUMENT, RELATING TO DISCLOSURES AND APPROVALS HAVE BEEN FULFILLED.

6. NO CHARGES, FEE, EXPENSES, PAYMENTS ETC. HAVE BEEN COMMITTED TO BE PAID TO ANY PERSON IN RELATION TO THIS PUBLIC OFFERING EXCEPT FOR THOSE AS DISCLOSED IN OFFER FOR SALE DOCUMENT.

For and behalf of PAKISTAN ALUMINIUM BEVERAGE CANS LIMITED

-Sd- ___________________________ Adnan Shaikh Chief Financial Officer

-Sd- ___________________________ Azam Sakrani Chief Executive Officer


Page 3 of 138

SUPPLEMENT TO THE OFFER FOR SALE DOCUMENT

Note: This Supplement shall be published within 3 working days of the close of Bidding Period in at least all those newspapers in

which the Offer for Sale Document of Pakistan Aluminium Beverage Cans Limited is published.

This Supplement is being published pursuant to The Public Offering Regulations, 2017 and in continuation of the Offer for Sale

Document of Pakistan Aluminium Beverage Cans Limited earlier published on 14th June 2021

Pakistan Aluminium Beverage Cans Limited

FLOOR PRICE : PKR 35/- PER SHARE STRIKE PRICE : PKR XX/- PER SHARE OFFER PRICE: PKR XX/- PER SHARE PRICE BAND (MAXIMUM 40%) : PKR 49/- PER SHARE Note: Since this Offer is being made through 100% book building with 25% allocation to retail investors, therefore, underwriting of the retail portion is not required. In case the Offer remains unsubscribed, the unsubscribed shares shall be allotted to the successful Bidders on pro rata basis. The successful Bidders have already given undertakings to subscribe such unsubscribed shares on pro rata basis.

Category wise Breakup of Successful Bidders

S. No Category No. of Bidders No. of shares provisionally allocated

1 Commercial Banks ● ●

2 Development financial institutions ● ●

3 Mutual Funds ● ●

4 Insurance Companies ● ●

5 Investment Banks ● ●

6 Employees’ Provident / Pension Funds ● ●

7 Leasing Companies ● ●

8 Modarabas ● ●

9 Securities Brokers ● ●

10 Foreign Institutional Investors ● ●

11 Any other Institutional Investors ● ●

Total Institutional Investors ● ●

Individual Investors: ● ●

12 Foreign Investors ● ●

13 Local ● ●

Total Individual Investors ● ●

GRAND TOTAL

The bidders shall give an undertaking along with the application that they would subscribe to the unsubscribed shares, if any, by

the retail investors and their remaining bid money would remain deposited/ blocked till allotment of unsubscribed shares by the

retail investors, if any, to them on pro-rata basis. In case the retail portion is fully subscribed, the bid money shall be immediately

refunded or unblocked.


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Glossary of Technical Terms

ACD Additional Custom Duty

ACT Securities Act, 2015

AHL Arif Habib Limited

BR Book Runner

BVPS Book Value Per Share

CAGR Compound Annualized Growth Rate

CDA Central Depository Act, 1997

CDC / CDCPL Central Depository Company of Pakistan Limited

CDC Regulations Central Depository Company of Pakistan Limited Regulations

CDS Central Depository System

CES Centralized e-IPO System

COI Certificate of Incorporation

Commission / SECP Securities and Exchange Commission of Pakistan

Companies Act Companies Act, 2017

CRO Company Registration Office

CUIN Computerized Unique Identification Number

CVT Capital Value Tax

CY Calendar Year – January to December

EBIT Earnings Before Interest & Taxes

EBITDA Earnings Before Interest Taxes, Depreciation & Amortization

EPS Earnings Per Share

ERF Export Refinance Facility

FATR Finance Against Trust Receipt

FBR Federal Board of Revenue

FED Federal Excise Duty

FIM Finance Against Imported Merchandise

FOREX Foreign Exchange

FY Fiscal Year – July to June


Page 5 of 138

GCC Gulf Cooperation Council

GDP Gross Domestic Product

GOP Government of Pakistan

HNWI High Net Worth Individuals

ITO Income Tax Ordinance, 2001

IOCO Input Output Co-efficient Organization

LC Letter of Credit

LIBOR London Interbank Offer Rate

LME London Metal Exchange

KIBOR Karachi Interbank Offer rate

MEP Mechanical, Electrical and Plumbing

Ml Milliliter

NICOP National Identity Card for Overseas Pakistani

NOC No Objection Certificate

p.a. Per Annum

PABC Pakistan Aluminium Beverage Cans Limited

PES PSX’s e-IPO System

PET Polyethylene Terephthalate

PKR or Rs. Pakistan Rupee(s)

PRA Punjab Revenue Authority

PSX / Exchange Pakistan Stock Exchange Limited

RF Running Finance

SCRA Special Convertible Rupee Account

SST Sindh Sales Tax

UIN Unique Identification Number

USD US Dollar

WHT Withholding Tax


Page 6 of 138

DEFINITIONS

Application Money In case of bidding for shares out of the Book Building Portion, the total amount

of money payable by a successful Bidder which is equivalent to the product of

the Strike Price and the number of shares to be allotted.

Banker to the Book Building Any bank with whom an account is opened and maintained by the Company for

keeping the Bid Amount.

Faysal Bank Limited Limited is appointed as Banker to the Book Building for this

Offer.

Bid An indication to make an Offer during the Bidding Period by a Bidder to subscribe

to the Ordinary Shares of Pakistan Aluminium Beverage Cans Limited at a price

at or above the Floor Price, including upward revisions thereto. An Eligible

Investor shall not make a Bid with price variation of more than 10% of the

prevailing indicative Strike Price subject to a maximum Price Band of 40% of the

Floor Price. Please refer to paragraph 12.1.2 for details.

Bid Amount/Bid Money The amount equal to the product of the number of shares Bid for and the Bid

Price.

Bid Collection Center Designated offices of the Book Runner where bids are received and processed.

For this Offer, addresses of the Bid Collection Centers are provided in paragraph

12.1.7 of this Offer For Sale Document.

Bid Price The price at which Bid is made for a specified number of shares.

Bid Revision The Eligible Investors can revise their bids upward subject to the provision of

regulation 10(2)(iii) of the PO Regulations. The Bids can be revised with a price

variation of not more than 10% from the prevailing indicative Strike Price in

compliance with regulation 10 (2)(iii) of the PO Regulations.

As per regulation 10 (2) (vi) of the PO Regulations, the Bidder shall not make

downward revision both in terms of Bid Price and Bid Volume; Provided that in

case of upward revision of the Bid Price, the number of shares Bid for i.e. Bid

Volume may be adjusted ensuring that the Bid Amount or Bid Money remains

the same.

As per regulation 10 (2) (vii) of the PO Regulations, the Bidder shall not

withdraw their Bids.

Bidder An Eligible Investor who makes Bids for shares in the Book Building process.

Bidding Form The form prepared by the Company for the purpose of making Bids.

Bidding Period The period during which Bids for subscription of shares are received.


Page 7 of 138

The Bidding Period shall be of two days, from 22nd June 2021 to 23rd June 2021

both days inclusive (daily from 9:00 a.m. to 5:00 p.m.).

Book Building

A process undertaken to elicit demand for shares offered through which Bids are

collected from the Bidders and a book is built which depicts demand for the

shares at different price levels.

Book Building Account

An account opened by the Company with the Collection Bank. The Bidder will pay

the Margin Money / Bid Amount through demand draft, pay order or online

transfer in favor of this account as per the instructions given in paragraph 12.1.16

of this Offer For Sale Document and the balance of the Application Money, if any,

shall be paid through this account after successful allocation of shares under

Book Building.

Book Building Portion The part of the total Offer allocated for subscription through the Book Building.

Book Building System An online electronic system operated by the Designated Institution for

conducting Book Building.

Book Runner A securities broker or a scheduled bank who holds a valid license from the

Commission to act as an Underwriter and has been appointed as Book Runner

by the Company.

Arif Habib Limited has been appointed as Book Runner for this Offer.

Collection Bank Faysal Bank Limited are the Collection Banks for the Book Building Portion. For

this purpose, Pakistan Aluminium Beverage Cans Limited has opened an account

titled “Pakistan Aluminium Beverage Cans Ltd. - OFS Book Building Account”,

Number: 3190301900238851 at its Sehar Commercial Branch, Karachi. The

Collection Banks shall keep and maintain the Bid Money in the said account. Once

the Strike Price is determined and lists of successful Bidders and successful

applicants/allotters are finalized and shares are credited to the successful Bidders

and applicants, the Lead Manager, after obtaining NOC from PSX, may request in

writing to the Collection Banks for transfer of the money of successful and

accepted applications to the Book Building account(s).

Commission Securities & Exchange Commission of Pakistan (“SECP”).

Company Pakistan Aluminium Beverage Cans Limited (the “Company” or “PABC”).

Company’s Legal Advisor Muhammad Mahmood Arif

Consolidated Bids A Bid which is fully or partially beneficially owned by persons other than the one

named therein.


Page 8 of 138

Designated Institution Includes Securities Exchange, central depository or clearing house approved by

the Commission to provide a system for conducting Book Building.

Pakistan Stock Exchange Limited (“PSX”) will act as the Designated Institution for

this Offer.

Dutch Auction Method The method through which Strike Price is determined by arranging all the Bid

Prices in descending order along with the number of shares and the cumulative

number of shares Bid for at each Bid Price. The Strike Price is determined by

lowering the price to the extent that the total number of Shares offered under

the Book Building Portion are subscribed.

e-IPO facility E-IPO refers to electronic subscription of applications for subscription of

securities offered in an IPO. The following systems are available for e-IPOs:

(i) PSX’s e-Initial Public Offering System (PES): In order to facilitate investors, the Pakistan Stock Exchange Limited (“PSX”) has

developed an e-IPO System (“PES”) through which applications for subscription

of securities offered to the general public can be made electronically. PES can be

accessed through the web link ‘https://eipo.psx.com.pk’. Payment of

subscription money can be made through 1LINK or NIFT.

For making application though PES, investors must be registered with PES. The

PES registration form is available 24/7, all throughout the year. Registration is

free of cost and can be done by:

the investor himself, or

the TREC Holder with whom the investor has a sub-account, or

the Bank with whom the investor has a bank account.

Similarly, an e-IPO application can be filed by:




Registered investors with PES can submit their applications through the web link,

‘https://eipo.psx.com.pk’, 24 hours a day during the subscription period which

will close at midnight on 30th June 2021.

For further guidance and queries regarding PES, investors may contact PSX

representative Mr. Farrukh Shahzad at phone number 111-001-122 or (021)-

135274411, and email ‘[email protected]’.

(ii) Centralized e-IPO System (CES): CES can be accessed through the web link (www.cdceipo.com). Payment of

subscription money can be made through 1LINK’s member banks available for

CES.

http://eipo.psx.com.pk/

https://eipo.psx.com.pk/

mailto:[email protected]


Page 9 of 138

For making application though CES, investors must self-register with CES.

Investors who are registered with CES can submit their applications through the

web link www.cdceipo.com 24 hours a day during the subscription period which

will close at midnight on 30th June 2021.

For further guidance and queries regarding CES and opening of CDS account,

investors may contact CDC at phone number: 0800 – 23275 (CDCPL) and e-mail:

[email protected] or Mr. Farooq Ahmed Butt at Phone 021-34326030 and

email: [email protected]

Eligible Investor An Individual and Institutional Investor whose Bid Amount is not less than the

Minimum Bid Size of PKR 1,000,000 (One Million Rupees only).

Floor Price The minimum price per share set by the Company in consultation with Lead

Manager. For this Offer, Floor Price is PKR 35/- per share.

General Public

All Individual and Institutional Investors including both Pakistani (residents &

non-residents) and foreign investors.

Initial Public Offer (IPO) Initial Public Offering or IPO means first time Offer of securities to the general

public.

Institutional Investors Any of the following entities:

A financial institution; A company as defined in the Companies Act, 2017; An insurance company established under the Insurance Ordinance, 2000; A securities broker; A fund established as Collective Investment Scheme under the Non-Banking

Finance Companies and Notified Entities Regulations, 2008; A fund established as Voluntary Pension Scheme under the Voluntary

Pension System Rules, 2005; A private fund established under Private Fund Regulations, 2015; Any employee’s fund established for beneficial of employees; Any other fund established under any special enactment; A foreign company or any other foreign legal person; and Any other entity as specified by the Commission.

Lead Manager/Consultant to

the Issue

Any person licensed by the Commission to act as a Lead Manager/Consultant to

the Issue.

Arif Habib Limited has been appointed as Lead Manager/Consultant to the Issue

by Company for this Offer.

Limit Bid The Bid at a Limit Price.





Page 10 of 138

Limit Price The maximum price (up to 40% of the Floor Price) a prospective Bidder is willing

to pay for a share under Book Building.

Listing Regulations Chapter 5 of the Rule Book of the Pakistan Stock Exchange Limited, titled ‘Listing

of Companies and Securities Regulation’.

https://www.psx.com.pk/psx/themes/psx/uploads/PSX-Rulebook-updated-on-

May-21-2021.pdf

Margin Money The partial or total amount, as the case may be, paid by a Bidder at the time of

registration as an Eligible Investor. The Book Runner shall collect full amount of

the Bid Money as Margin Money in respect of Bids placed by an individual

investor and not less than twenty five percent (25%) of the Bid Money as Margin

Money in respect of Bids placed by an Institutional Investor.

Minimum Bid Size The Bid Amount equal to One Million Rupees (PKR 1,000,000/-).

Offer for Sale (“OFS”) Offer of 93,888,000 Ordinary Shares representing 26% of total paid-up capital

having a Face Value of PKR 10/- each.

The entire Offer will be offered through Book Building at a Floor Price of PKR 35/-

per share.

Offer For Sale Document Offer For Sale Document means any document described or issued as an Offer

For Sale Document and includes any document, notice, circular, material,

advertisement, and offer for sale document, publication or other invitation

offering to the public (or any section of the public) or inviting offers from the

public for the subscription or purchase of any securities of a company.

Offer Price The price at which Ordinary Shares of the Company are offered to the General

Public. The Offer Price will be the Strike Price.

Offeror/Seller Ashmore Mauritius PABC Limited.

Ordinary Shares Ordinary Shares of Pakistan Aluminium Beverage Cans Limited having face value

of PKR 10.00/- each.

PO Regulations The Public Offering Regulations, 2017.

https://www.secp.gov.pk/document/s-r-o-296i-2017-public-offering-

regulations-2017/?wpdmdl=41322&refresh=60ae4dfb060851622035963

Price Band Floor Price with an upper limit of 40% above the Floor Price

https://www.psx.com.pk/psx/themes/psx/uploads/PSX-Rulebook-updated-on-May-21-2021.pdf

https://www.psx.com.pk/psx/themes/psx/uploads/PSX-Rulebook-updated-on-May-21-2021.pdf

https://www.secp.gov.pk/document/s-r-o-296i-2017-public-offering-regulations-2017/?wpdmdl=41322&refresh=60ae4dfb060851622035963

https://www.secp.gov.pk/document/s-r-o-296i-2017-public-offering-regulations-2017/?wpdmdl=41322&refresh=60ae4dfb060851622035963


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Registration Form

Registration Period

The form which is to be submitted by the Eligible Investors for registration to

participate in the Book Building process.

The period during which registration of Bidders is carried out. The registration

period shall commence three days before the start of the Bidding Period from

17/06/2021 to 22/06/2021 from 9:00 am to 5:00 pm and shall remain open till

3:00 pm on the last day of the Bidding Period i.e 23/06/2021.

Related Employees Related Employees mean such employees of the Company, the Offeror, Lead

Manager, and the Book Runner who are involved in the Offer. Please refer to

paragraph 3.22.5 for further details.

Sponsor A person who has contributed initial capital in the Company or has the right to

appoint majority of the directors on the board of the Company directly or

indirectly;

A person who replaces the person referred to above; and

A person or group of persons who has control of the Company whether directly

or indirectly.

Step Bid Step Bid means a series of Limit Bids at increasing prices. In case of a Step Bid the

amount of each step will not be less than Rupees One Million (PKR 1,000,000/-).

Strike Price

The price per Ordinary Share of the Offer determined / discovered on the basis

of Book Building process in the manner provided in the Regulations, at which the

shares are Issued to the successful Bidders. The Strike Price will be disseminated

after conclusion of Book Building through publication in at least all those

newspapers in which the Offer For Sale Document was published and also posted

on the websites of the Securities Exchange, Lead Manager, Book Runner and the

Company.

Supplement to the Offer For

Sale Document

The Supplement to the Offer For Sale Document shall be published within three

(3) working days of the closing of the Bidding Period at least in all those

newspapers in which the Offer For Sale Document was earlier published and

disseminated through the Securities Exchange where shares are to be listed.

System An online electronic system operated by the Designated Institution for

conducting Book Building.

Termination Event Each of the following events shall constitute a Termination Event:

1. The Company fails to pay any amount under the Syndicated Term Financing

Agreement.

2. The Company fails to comply with any obligation under the Syndicated Term

Financing Agreement.

3. Any misrepresentation made in the finance documents.


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Interpretation:

ANY CAPITALIZED TERM CONTAINED IN THIS OFFER FOR SALE DOCUMENT, WHICH IS IDENTICAL TO A CAPITALIZED TERM DEFINED HEREIN, SHALL, UNLESS THE CONTEXT EXPRESSLY INDICATES OR REQUIRES OTHERWISE AND TO THE EXTENT AS MAY BE APPLICABLE GIVEN THE CONTEXT, HAVE THE SAME MEANING AS THE CAPITALIZED / DEFINED TERM PROVIDED HEREIN.

4. Any Authority condemns, nationalizes, seizes, or otherwise expropriates all or

any substantial part of the property or other assets of the Company.

5. The Company ceases or threatens to cease to carry on its business or any

substantial part of its business or any substantial part of its business or is unable

to pay its liabilities.

6. The Company is liquidated or declared bankrupt or an order is made or an

effective resolution passed for Company’s bankruptcy or dissolution of the

Company.

7. Any encumbrancer lawfully takes possession of whole or material part of the

undertaking of assets of the Company.

8. The Company fails to make any payment in respect of any of its Liabilities

exceeding PKR 100,000,000 and the failure is not remedied within 15 Business

days.

9. Revocation of financing documents or any other documents that could have

material adverse impact.

10. The security created by the Company to the facility parties detoriates in

quality or becomes inadequate in the sole judgement of financing parties.


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Table of Contents

1 APPROVALS AND LISTING ON THE STOCK EXCHANGE ............................................................................... 14

2 SUMMARY OF THE OFFER FOR SALE DOCUMENT .................................................................................... 16

3 OVERVIEW, HISTORY AND PROSPECTS.................................................................................................... 21

3(A) SHARE CAPITAL AND RELATED MATTERS ............................................................................................... 40

4 PRINCIPAL PURPOSE OF THE OFFER ....................................................................................................... 44

4(A) VALUATION SECTION .......................................................................................................................... 45

5 RISK FACTORS ..................................................................................................................................... 49

6 FINANCIAL INFORMATION ..................................................................................................................... 59

7 BOARD AND MANAGEMENT OF THE COMPANY ...................................................................................... 81

8 LEGAL PROCEEDINGS AND OVERDUE LOANS ........................................................................................... 87

9 UNDERWRITING ARRANGEMENT, COMMISSION, BROKERAGE AND OTHER EXPENSES ................................ 88

10 MISCELLANEOUS INFORMATION............................................................................................................ 90

11 MATERIAL CONTRACTS ......................................................................................................................... 92

12 BOOK BUILDING PROCEDURE/INSTRUCTIONS FOR REGISTRATION AND BIDDING ....................................... 96

13 APPLICATION AND ALLOTMENT INSTRUCTION ...................................................................................... 115

14 SIGNATORIES TO THE OFFER FOR SALE DOCUMENT ............................................................................... 122

15 SIGNATORIES OF COMPANY ................................................................................................................ 123

16 SIGNATORIES OF OFFEROR .................................................................................................................. 124

17 MEMORANDUM OF ASSOCIATION ....................................................................................................... 125

18 BOOK BUILDING REGISTRATION FORM ................................................................................................. 133

19 BIDDINGFORM ................................................................................................................................... 134

20 GENERAL SUBSCRIPTION FORM ........................................................................................................... 136


Page 14 of 138

1 APPROVALS AND LISTING ON THE STOCK EXCHANGE

APPROVAL OF THE SECURITIES AND EXCHANGE COMMISSION OF PAKISTAN

Approval of the Securities & Exchange Commission of Pakistan (the "Commission" or the "SECP") under Section 87(2) of the Securities Act, 2015 read with Section 88(1) thereof, has been obtained by Pakistan Aluminium Beverage Cans Limited for the offer, circulation and publication of this offering document (hereinafter referred to as the “Offer for Sale Document”) vide their letter No. SMD/PO/SA-88/03/2021 Dated June 7th 2021. DISCLAIMER:

IT MUST BE DISTINCTLY UNDERSTOOD THAT IN GIVING THIS APPROVAL, SECP DOES NOT TAKE ANY RESPONSIBILITY FOR THE FINANCIAL SOUNDNESS OF THE COMPANY AND ANY OF ITS SCHEMES STATED HEREIN OR FOR THE CORRECTNESS OF ANY OF THE STATEMENTS MADE OR OPINIONS EXPRESSED WITH REGARD TO THEM BY THE COMPANY IN THIS OFFER FOR SALE DOCUMENT.

SECP HAS NOT EVALUATED QUALITY OF THE OFFER AND ITS APPROVAL FOR OFFER, CIRCULATION AND PUBLICATION OF THE OFFER FOR SALE DOCUMENT SHOULD NOT BE CONSTRUED AS ANY COMMITMENT OF THE SAME. THE PUBLIC / INVESTORS SHOULD CONDUCT THEIR OWN INDEPENDENT DUE DILIGENCE AND ANALYSIS REGARDING THE QUALITY OF THE OFFER BEFORE SUBSCRIBING.

APPROVAL OF OFFER FOR SALE DOCUMENT BY PSX

The Offer for Sale Document of the Company has been approved by PSX vide letter No. GEN-871 dated May 18, 2021 in accordance with the requirements of the Listing Regulations.

DISCLAIMER:

PSX HAS NOT EVALUATED THE QUALITY OF THE OFFER AND ITS APPROVAL SHOULD NOT BE CONSTRUED AS ANY COMMITMENT OF THE SAME. THE PUBLIC / INVESTORS SHOULD CONDUCT THEIR OWN INDEPENDENT INVESTIGATION AND ANALYSIS REGARDING THE QUALITY OF THE OFFER BEFORE SUBSCRIBING.

THE PUBLICATION OF THIS DOCUMENT DOES NOT REPRESENT SOLICITATION BY PSX.

THE CONTENTS OF THIS DOCUMENT DOES NOT CONSTITUTE AN INVITATION TO INVEST IN SHARES OR SUBSCRIBE FOR ANY SECURITIES OR OTHER FINANCIAL INSTRUMENT BY PSX, NOR SHOULD IT OR ANY PART OF IT FORM THE BASIS OF, OR BE RELIED UPON IN ANY CONNECTION WITH ANY CONTRACT OR COMMITMENT WHATSOEVER OF PSX.

IT IS CLARIFIED THAT INFORMATION IN THIS OFFER FOR SALE DOCUMENT SHOULD NOT BE CONSTRUED AS ADVICE ON ANY PARTICULAR MATTER BY PSX AND MUST NOT BE TREATED AS A SUBSTITUTE FOR SPECIFIC ADVICE.

PSX DISCLAIMS ANY LIABILITY WHATSOEVER FOR ANY LOSS ARISING FROM OR IN RELIANCE UPON THIS DOCUMENT TO ANYONE, ARISING FROM ANY REASON, INCLUDING, BUT NOT LIMITED TO, INACCURACIES, INCOMPLETENESS AND / OR MISTAKES, FOR DECISIONS AND /OR ACTIONS TAKEN, BASED ON THIS DOCUMENT.

PSX NEITHER TAKES RESPONSIBILITY FOR THE CORRECTNESS OF CONTENTS OF THIS DOCUMENT NOR THE ABILITY OF THE COMPANY TO FULFILL ITS OBLIGATIONS THEREUNDER.

ADVICE FROM A SUITABLY QUALIFIED PROFESSIONAL SHOULD ALWAYS BE SOUGHT BY INVESTORS IN RELATION

TO ANY PARTICULAR INVESTMENT.

FILING OF OFFER FOR SALE DOCUMENT AND OTHER DOCUMENTS WITH THE REGISTRAR OF

COMPANIES

Pakistan Aluminium Beverage Cans Limited has delivered to the Registrar of Companies as required under Section

57 (1) of the Act, a copy of this Offer for Sale Document signed by all the Directors of the Company.


Page 15 of 138

LISTING AT PSX

Application has been made to PSX for permission to deal in and for quotation of the shares of the Company.

If for any reason the application for formal listing is not accepted by PSX or approval for formal listing is not granted by PSX before the expiration of twenty-one days from the date of closing of the subscription period / list or such longer period not exceeding forty-two days as may, within the said twenty-one days, be notified to the applicants for permission by the PSX, the Company undertakes that a notice to that effect will immediately be published in the press and will refund Application Money to the applicants without surcharge as required under the provisions of Section 69 of the Companies Act.

If any such money is not repaid within eight (08) days after the Company becomes liable to repay it, the Directors of the Company shall be jointly and severally liable to repay that money from the expiration of the eight day together with surcharge at the rate of two percent (2.0%) for every month or part thereof from the expiration of the eight day and, in addition, shall be liable to a penalty of level 3 on the standard scale in accordance with the provisions of sub-section (2) of Section 69 of the Companies Act.

As required under sub-section (3) of Section 69 of the Companies Act, the Application Money including the Bid Money, in case of Book Building, shall be deposited and kept in a separate bank account in a scheduled bank so long as the Company may become liable to repay it under sub-section (2) of Section 69 of the Companies Act; and, if default is made in complying with the said sub-section (3), the Company and every officer of the Company who authorizes or permits the default shall be liable to a penalty of level 2 on the standard scale.


Page 16 of 138

2 SUMMARY OF THE OFFER FOR SALE DOCUMENT

PRIMARY BUSINESS OF PAKISTAN ALUMINIUM BEVERAGE CANS LIMITED

Pakistan Aluminium Beverage Cans Limited (PABC or the Company) started its operations in 2017 as the sole local

manufacturer of aluminium beverage cans in Pakistan, realizing the potential of growth in Pakistan’s & Afghanistan’s

carbonated soft drinks market which relied upon imported cans. Manufacturing facility of the Company is situated

in M3 Industrial City, Faisalabad, which is a Special Economic Zone (“SEZ”) and is well positioned close to certain

major bottlers and beverages companies including Coca Cola and PepsiCo Pakistan. The Company enjoys a 10-year

tax holiday at the SEZ under the Special Economic Zone Act which started from July 2017. However, PABC pays

minimum turnover tax at the rate of 1.5%.

The proximity to the local beverage companies, the location near the motorway network, a route to Afghanistan

market, lower cost of locally produced cans versus imports and significant saving on transportation has allowed PABC

to establish strong footprints in the local and Afghanistan’s market within a short span of time reaching volumetric

sales of 402 Million cans in CY20 from 200 Million cans in CY18 showing a growth of over 100% on volumetric basis

in 2 years.

In PKR Million CY18 % CY19 % CY20 % 4MCY21 %

Local Sales 1,477 65.0% 3,216 60.3% 3,681 64.8% 1,822 63.8

Export Sales 795 35.0% 2,114 39.7% 1,998 35.2% 1,035 36.2

Gross Sales 2,272 5,330 5,679

ABOUT THE OFFER

The Offer comprises of 93,888,000 Ordinary Shares of face value worth PKR 10/- each offered by the Ashmore Mauritius PABC Limited which is the Sponsor of Pakistan Aluminium Beverage Cans Limited.

The entire Offer of 93,888,000 Ordinary Shares will be offered through the Book Building process at a Floor Price of PKR 35/- per share. The bidders shall be allowed to place bid for the entire offer size. Initially, 75% of the Offer size i.e. 70,416,000 Ordinary Shares will be allotted to successful Bidders and 25% of the Offer i.e. 23,472,000 Ordinary Shares will be offered to retail investors. Unsubscribed shares, if any, of the General Subscription portion will be allotted to successful Bidders of the Book Building Portion on a pro-rata basis.

The Floor Price of PKR 35/- has a maximum Price Band of 40%, above which no Bid shall be accepted. At maximum

Price Band, the Strike Price shall be PKR 49/- per share.

SPONSORS OF PAKISTAN ALUMINIUM BEVERAGE CANS LIMITED

Existing Sponsors of the Company are:

1. Ashmore Mauritius PABC Limited 51.00%

2. Liberty Group Pakistan

Hamida Salim Mukaty 36.75%

Muhammad Salim Mukaty 12.25%

Zain Ashraf Mukaty 0.00%

______

49.00%

Liberty Group, founded in 1908 in Karachi, is a leading name in the textile and power sectors in Pakistan. The Group

also have investments in cement and pharma sectors of Pakistan. The textile segment of the Group is involved in


Page 17 of 138

manufacturing and processing of various fabrics and textile made-ups. The power segment of the Group owns,

operates, and maintains a residual furnace oil power project with an installed capacity of 200 megawatts in

Faisalabad, Pakistan and various other power plants. Details are disclosed in Section 3.5.1.

Ashmore Mauritius PABC Limited was incorporated by Ashmore Investment Management Limited (“AIML”) in Oct,

2014.

Ashmore Mauritius PABC Limited was incorporated as a public limited company in Mauritius by

Ashmore Investment Management Limited (“AIML”)

AIML is a specialist emerging markets investment manager with nearly 30 years’ experience of

investing in these markets.

AIML is a private limited company registered in England & Wales

Ashmore Mauritius PABC Limited (“Offeror/Seller”) is divesting 26% of the paid up capital of the Company through

this OFS. It has also entered into agreements to sell 18,052,974 shares i.e. approximately 5% of the paid up capital

of Company at a price of PKR 30.80 per share to Mrs. Hamida Salim Mukaty (part of Liberty Group) and 72,221,651

shares i.e. approximately 20% of the paid up capital of Company at a price of PKR 31.85 to Soorty Enterprises (Private)

Limited (together referred to hereinafter as “Purchasers”) by way of private placement (both agreements are

referred to as “Private Placement”). The shares will be transferred in line with the transfer of shares for this OFS.

For more details, please refer to section 3 (A) 1.

PRE AND POST OFFER SHAREHOLDING OF THE SPONSORS

Given below is the Pre and Post OFS shareholding of the Sponsors of the Company:

*3,113 shares are held by Directors of the Company Sponsors of the Company after completion of OFS excluding the impact of Private Placement:

Sponsors Shareholding % Shareholding

Ashmore Mauritius PABC Limited 90,274,625 24.99%

Hamida Salim Mukaty 132,707,283 36.75%

Muhammad Salim Mukaty 44,234,620 12.25%

Zain Ashraf Mukaty 613 0.00%

Total 267,217,141 74.00%

Sponsors of the Company after completion of OFS including the impact of Private Placement:



Soorty Enterprises (Private) Limited 72,221,651 20.00%



Total 267,217,141 74.00%

Description Pre OFS Post OFS

Ashmore Mauritius PABC Limited 184,162,625 -

Hamida Salim Mukaty 132,707,283 150,760,257

Muhammad Salim Mukaty 44,234,620 44,234,620

Zain Mukaty 613 613

Soorty Enterprises (Private) Limited - 72,221,651

Shares held by Sponsors* 361,105,141 267,217,141

% shareholding 99.99% 74.00%


Page 18 of 138

As per the definition of Sponsor laid out in PO Regulations, the shares sold under Private Placement will be classified

as Sponsor shares and the lock in period for Sponsors as given under regulation 5 (1) and 5 (2) will be applied on

them. In case, the Private Placement is not concluded for any reason whatsoever, Ashmore Mauritius PABC Limited

will continue to hold these shares and will remain classified as Sponsors.

PRINCIPAL PURPOSE OF THE OFFER

The principal purpose of the Offer for Sale of Shares is to list the Company on the Pakistan Stock Exchange and to

broaden the Company’s shareholder base by offering shares to the general public, HNWIs and Institutions. Ashmore

Mauritius PABC Limited, typical of any private equity strategy, is divesting its shareholding to realize returns

delivered on their investment in PABC through a combination of this Offer for Sale and Private Placement (Details of

which is given in Section 3(A) 1).

VALUATION

For key factors justifying the price of the Offer, please refer to section 4A.

QUALIFIED OPINION, IF ANY, GIVEN BY THE AUDITOR DURING THE LAST THREE FINANCIAL YEARS

The auditors have not given any qualified or adverse opinion during the last three financial years on PABC’s financial

statements.

FINANCIAL INFORMATION

In PKR Million, unless stated otherwise CY18 CY19 CY20 4MCY216

Audited Audited Audited Reviewed

Share Capital5 2,943.4 3,611.1 3,611.1 3,611.1

Net Worth/Total Equity 1,718.2 2,533.3 3,144.0 3,742.6

Revenue 2,056.6 4,808.5 5,083.8 2,578.9

Gross Margin7 (10.7%) 22.3% 30.3% 34.2%

Operating Margin (24.5%) 17.5% 22.1% 28.0%

Profit After Tax (798.5) 147.5 610.7 596.3

Profit After Tax Margin (38.8%) 3.1% 12.0% 23.2%

Earnings per share (PKR)1 (2.7)5 0.4 1.69 1.65

Break-up value per share (PKR)2 5.85 7.0 8.7 10.36

Total Borrowings3 5,656.2 5,470.5 4,555 3,678

Total Debt to Capital Ratio4 70.3% 61.2% 51.7% 38.9%

Debt Service Coverage Ratio (1.06) x 1.46 x 2.65 x 8.39 x

Cash flow From Operations (1,560.3) (75.6) 705 879.8

1. Earnings per share is based on total profit after tax divided by outstanding shares at corresponding period end;

2. Break-up value per share is based on total equity of the company divided by outstanding shares at corresponding period end;

x13. Total borrowings include long term debt, lease liabilities, current portion of the long term debt, and short term borrowing;

4. Total debt to total capital ratio is based on total debt (long term debt, current portion of long term debt, and short term borrowing) divided by total capital of the Company;

5. Additional number of shares were issued in CY19 which had a direct impact on Breakup value per share and Earning per share.

6. Auditor’s reviewed accounts

7. The gross profit margin of the Company is increasing on the back of favorable sales mix (local sales have better contribution margins than export sales), production efficiency,

reduction of spoilage from 13% in CY18 to 2.3% in CY20 and better inventory management

8. The net profit margin of the Company is increasing on the back of increasing gross profit margin, reduction in short term borrowing and the Company being able to obtain

Export Refinance Loan (markup cost of 3.5%) from State Bank replacing the Running Finance from commercial banks (markup cost of 7.5%)

For detailed information regarding financials of the Company, please refer to Section 6.


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LEGAL PROCEEDINGS

Order dated

Issuing Authority

Matter

Tax Period

Order Amount/ Financial

Impact (PKR MN)

Current status

Management's Stance

Provision in Financial Statements

12.09.2019 Punjab Revenue Authority

Non-deduction of sales tax as recipient of services

01 July 2016 to 30 June 2017

170.9

The hearing was fixed for 25th March 2021 but it was adjourned to a date which will be announced later

The management is confident that they have good arguable case and the issue will be finally decided in the favor of the Company.

Company has not recorded any provision in financial statements. Please see Note on Contingencies in the Financial Statements for details.

There are no significant outstanding legal or taxation proceedings other than the normal course of business involving

the Company, its Sponsors, substantial shareholders and directors, which could have a material impact on the

Company.

Legal proceedings are disclosed in detail in Section 8 of the Offer for Sale Document, titled Legal Proceedings and

Overdue Loans.

RISK FACTORS

For key risk factors that would have an impact on the Company, its business operations and the Offer, please refer

to Section 5.

RELATED PARTY TRANSACTIONS

The related parties comprise associated undertakings, Directors of the Company, key management personnel and post-employment benefit plans. The Company in normal course of business carries out transactions with various related parties. Transactions entered with related parties are as follows:

Name Relationship Nature CY18 CY19 CY20

Ashmore Mauritius PABC Limited1 Parent Company

Expenses paid on

behalf of parent

company - 6.1 0.5

Azam Sakrani CEO Shares Issued

against cash - 0.001 -

Liberty Mills Limited2 Group

Company

Expenses paid on

behalf of associated

company - 0.6 0.7

Provident Fund Employees

Fund Loan Received - 8.1 9.2


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Provident Fund Employees Fund

Loan Repaid - 59 -

KIRE AB3 Common

Management

Technical

Consultancy 25.9 1.6 -

All amounts in PKR MN

1.These shares were later transferred paid on behalf of Ashmore Mauritius PABC Limited while they were marketing PABC’s stake to strategic investors

2. These expenses were paid on behalf of Liberty Mills Limited while they were marketing PABC to strategic investors

3. Kire AB is owned by Erik Hoggard who was the CEO of PABC back in 2018. Mr. Ms. Hamida Salim Mukaty.Hoggard is a well-known technician in can manufacturing

industry and provided consultancy with regards to plant operations.


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3 OVERVIEW, HISTORY AND PROSPECTS

3.1 COMPANY HISTORY & OVERVIEW

Ashmore Investment Management Limited (owned by Ashmore Investments (UK) Limited)), an Emerging Markets

investment manager with previous experience in investing in aluminium can manufacturing plants in Africa and Asia,

conducted a global screening for opportunities in can manufacturing space in 2013. The market assessment, based

on conversations with major bottlers, concluded that carbonated soft drinks and energy drinks had been growing at

a high rate in both Pakistan and Afghanistan, yet there existed no indigenous cans production facility to address the

growing demand. These increasing volumes made investment in a manufacturing facility supplying aluminium

beverage cans to beverages industry players in Pakistan and Afghanistan an attractive opportunity. Beverage

manufacturers in Pakistan routinely faced problems with imports of aluminium beverage cans as ordering them from

outside the country entailed extended lead times, a potential of supply availability issues during summer months,

and therefore a requirement to hold large inventory volumes of empty cans. Hence, the project was planned to

address genuine market needs of the beverages industry.

Pakistan Aluminium Beverage Cans Limited was incorporated by Ashmore Mauritius PABC Limited in Dec 2014 to

develop the project, finalizing location, securing letters of intent from major bottlers and appointed Roeslein and

Associates Inc., from USA as equipment integrators and Descon Engineering Limited as local EPC contractor.

During the construction of the project, Liberty Group, a prominent name in the textile manufacturing sector and the

power generation sector of Pakistan acquired equity stake in PABC, to execute the project using world class

contractors and state of the art equipment. The project was speedily and successfully completed in 15 months with

trial production starting in July 2017.

PABC started its commercial operations in Sep 2017 as a sole local manufacturer of aluminium beverage cans in

Pakistan. The Manufacturing facility of the Company is situated in Special Economic Zone (“SEZ”), M3 Industrial City,

Faisalabad and is ideally positioned in close proximity to certain major bottlers and beverages companies including

Coca Cola and PepsiCo Pakistan. Haidri Beverages (Pepsi Cola franchisee) is situated in Islamabad, while Coca Cola

bottling plants are located in Multan, Gujranwala, Sialkot, Faisalabad, Rahim Yar Khan and Lahore in addition to their

plants in Karachi and Hyderabad

The Company within its third full year of operations (CY20) produced 444 Million cans against effective capacity of

600 Million cans per annum, exhibiting capacity utilization of 74%, despite experiencing Covid-19 induced lockdowns

and border closures - translating into sales of PKR 5,084 Million during CY20. The trend of growth is expected to

continue on the back of growth in consumption of beverages and the potential in export markets.

3.2 PATTERN OF SHAREHOLDING

Shareholder Name Number of shares % Shareholding status


Liberty Group 49.00%

1. Hamida Salim Mukaty 132,707,283 36.75%

2. Muhammad Salim Mukaty 44,234,620 12.25%

Name Pakistan Almuminium Beverage Cans Limited

Registration Number 0090925

Date of incorporation December 4, 2014

Commencement of business September 2017


Page 22 of 138

3. Zain Ashraf Mukaty 613 0.0001%

Shares Held by Directors 3,113 0.0001%

Total 361,108,254 100.0%

3.3 REVENUE DRIVERS

3.3.1. Growth in the Soft Drinks Market:

The consumption of soft drinks in Pakistan currently stands at 3.85 Billion liters in 2020 and expected to reach 5.34

Billion liters in 2025, registering a 5 – year CAGR of 6.7% on volume basis as per Euromonitor International.

The soft drink markets is segmented into off-trade and on-trade segments. The off trade channel includes

supermarkets, grocery stores, retail stores, kiosks, while the on trade channel includes restaurant, food stall etc.

Category 2015 2016 2017 2018 2019 2020

Off Trade 2,089 2,271 2,471 2,682 2,904 3,138

On Trade 633 686 743 800 858 715

Total (Million Litres) 2,722 2,957 3,214 3,482 3,763 3,852 Source: Euromonitor International

The growth in consumption of soft drinks is likely to continue increasing the demand for beverage packaging. This,

along with ongoing conversion from glass and PET bottles to aluminium beverage cans, accelerated post

establishment of a local beverage can manufacturing facility, is likely to keep driving revenue growth of the

Company, as it is currently the sole manufacturer of aluminium beverage cans in Pakistan. PABC currently supplies

to all material bottlers in Pakistan.

3.3.2. Expansion of Exports and Markets

PABC is currently exporting to Afghanistan market constituting approximately 35% of the Company’s sales during

CY20 (CY 19: 40%). The Company estimates holding majority of market share in the Afghanistan market while the

rest is currently catered to by imports from the region such as GCC. However, given the increasing level of trust,

closer proximity, low freight and higher degree of flexibility that PABC offers to Afghanistan’s bottlers, the Company

is continuing to grow its share of the market, now supplying to most of the major bottlers in Afghanistan. PABC

currently have long term contracts with franchisees and bottlers of Coca Cola, while it is also supplying beverage

cans to Afghanistan Beverage Industries Ltd. (franchisee of Pepsi Co.) and Alokozay Beverages in Afghanistan.

PABC has recently signed contracts to supply aluminium beverage cans to Wild Leaf Holdings in along side Alika LLC

in Tajikistan. In addition, PABC is also supplying cans to, American Canning, Canadian Canning and other leading

beverage bottlers in USA. In addition to this, PABC as part of its exports strategy, is securing long term sales contracts

with a number of bottlers in offshore markets, such as North America and will be exporting any excess production

capacity to these newer markets.

Over the longer run, PABC will also be exploring the potential of exporting aluminium beverage cans to Bangladesh

and the Central Asian regions (Uzbekistan, Tajikistan & Kazakhstan).

3.3.3. Shift from PET Packaging to Can Packaging

As awareness has developed regarding environmental sustainability and the issue of plastic waste, can makers

around the world are seeing an environmentally conscious end consumer driving an inflection point in beverage can

demand. There is an ongoing shift from PET packaging to aluminium can packaging because aluminium is infinitely

recyclable and is seen as more environment friendly.


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Due to Pakistan’s late entry into indigenous aluminium beverage cans production, the country is currently

significantly lagging behind in conversion from PET and glass bottles to aluminium beverage cans. However, PABC

believes this is rapidly changing due to environmental concerns and consumer preferences (longer shelf life, trendier

look and higher degree of carbonation preservation) which, consistent with trends from other emerging markets, is

likely to continue to drive growth in aluminium beverage can sales in Pakistan.

3.4. COST DRIVERS

3.4.1. Fluctuation in International Aluminium Prices

The main cost of the Company’s products is procurement of raw material (82% during CY 20). Prices of aluminium

coils (accounting for c. 60% material cost) and can-ends (c. 30% of direct material cost) are indexed to the London

Metal Exchange (“LME”) aluminium prices. The price fluctuations at LME is passed on to the customer which are

built into contracts, hedging the risk for the Company of escalating input prices. The coils are mostly purchased from

Novelis through a long term supplier agreement, while the can ends are procured from BaoFang. Other materials

used for production of aluminium cans include lubricating chemicals and layer pads for palletizing of the cans.

A three-year historical chart for the prices of aluminium is given below:

COMPANY ORGANOGRAM


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3.5 GROUP STRUCTURE OF SPONSORS

3.5.1. Liberty Group

,

3.5.2. Ashmore Mauritius PABC Limited

Ashmore Mauritius PABC Limited was incorporated by Ashmore Investment Management Limited (“AIML”) in Oct,

2014.

Ashmore Mauritius PABC Limited was incorporated as a public limited company in Mauritius by

Ashmore Investment Management Limited (“AIML”).

AIML is a specialist emerging markets investment manager with nearly 30 years’ experience of

investing in these markets.

AIML is a private limited company registered in England & Wales.

AIML is owned by Ashmore Investments (UK) Limited which is owned by Ashmore Group PLC.

3.5.3. Soorty Enterprises (Pvt) Ltd.

After the closure of this OFS and Private Placement, Soorty Enterprises (Pvt) Ltd. will be classified as Sponsor. Soorty

Enterprises (Incorporated in 1984) is a well-known name in denim and garment industry of Pakistan. Soorty Group

has taken 10% equity stake in one of the companies of Liberty Group i.e Liberty Power Tech Limited at the time of

its inception. The group structure of Soorty Enterprises is given below:


Page 25 of 138

3.6. KEY MILESTONES

Year Event

Dec 2014 Incorporated as a public unlisted entity in Pakistan and started detailed feasibility

Mar 2016 Site Secured in Faisalabad and construction mobilization

Mar 2016 Liberty Group invested in the project taking 49% share of the Company

July 2017 Trial production started

Sep 2017 Commercial Operations Commenced

Mar 2018 Plant successfully ramped up and all quality approvals secured from major bottlers

Apr 2019 Company shows positive EBITDA & records Net Profit

Jan 2020 PABC crosses monthly production of 55 million cans

Dec 2020 Yearly spoilage reduced to 2.3%, bringing the plant in line with global benchmarks

Mar 2021 PABC crosses monthly sales of 74 million cans

Apr 2021 PABC started exporting to USA

3.7. PRODUCTION CAPACITY

Production capacity and capacity utilization of Pakistan Aluminium Beverage Cans Limited is as follows:

Cans per annum CY18 CY19 CY20*

Rated Capacity 700,000,000 700,000,000 700,000,000

Effective Capacity 600,000,000 600,000,000 600,000,000

Actual Production 237,530,000 418,680,000 444,340,0001

Effective Capacity Utilization 39.58% 69.78% 74.05%

*The level of production was achieved despite prolonged COVID induced virtual lockdown, supply disruptions and

border closures.

The Company’s plant can produce 700 Million cans per annum if it had to produce only one size of can. Since the

Company produces cans of different sizes catering to demand of its customers, the time to change the size molds

brings its effective production capacity to approximately 600 Million cans per annum.

The Company started its operations in September 2017, with the first full year of its operation is CY18. Majority of

the CY18 was spend procuring approvals for Coke and Pepsi due to their rigorous quality checks. The Company was

1 Yearly spoilage was recorded to 2.31%


Page 26 of 138

able to show strong growth in CY19 capacity utilization levels. Despite of the fact that PABC had to shut down their

plants during Mar-20 and Apr-20 due to government’s announced industrial lockdown, the Company was able to

increase their capacity utilization.

The Company is in the process of adding capacity which is estimated to have total cost of USD 6.92 Mn (PKR 1,080

Million @ USD/PKR exchange rate of PKR 156.). For the said purpose, the Company has been able to procure Islamic

State Bank of Pakistan long term financing facility (ILTFF) from Faysal Bank Limited. The Company has plans to import

the following machinery:

Vendor Country of Origin

Machinery Cost in

USD Status

CarnaudMetalBox Engineering (CMB Engineering)

UK Bodymaker, Trimmers 1,854,660 LC issued

CarnaudMetalBox Engineering (CMB Engineering)

UK Lacquer Spray Machine 337,770 LC issued

UnimaQ UK Decorator 1,385,000 LC issued

Crown Engineering Corporation

UK Can line, Conveyors, Vacuum pump, Air Compressor, Steel structure, scrap handling system, Mist collection system

2,771,140 LC will be issued

Total 6,924,737

After this expansion, the rated capacity of the Company will increase to 950 million cans per annum as opposed to

current rated capacity of 700 million cans per annum. The expansion is expected to come online by June – 2022. The

entire expansion will be financed through ILTFF and internal cash.

3.8. INFRASTRUCTURE OVERVIEW

PABC’s manufacturing facility is built on a free hold land with plot size of 20.92 acres in Special Economic Zone (“SEZ”)

M3 Industrial City, Faisalabad. Roeslein & Associates Inc., USA (‘Roeslein’) were chosen as the Equipment Integrators

to supply and commission the aluminium beverage can manufacturing plant and Descon Engineering Limited for

constructing the plant (civil and MEP) infrastructure required to support equipment. Roeslein is one of the premier

engineering and systems provider and integrators in beverage can manufacturing industry with over 2 decades of

experience having built and designed more than 120 beverages can manufacturing plants in over 50 countries

around the world.

The manufacturing plant has a state of the art production line using equipment imported from US & UK. The line has

a current rated capacity to produce 700 Million cans per annum while its current effective capacity is approximately

600 Million cans per annum based on customers required sizes, mix and changeover requirements. The line has a

modularity in design whereby some equipment already has a higher built-in capacity for increased production/

efficiency while processes can be ramped-up with additional equipment to increase capacity. All the mechanical,

electrical and plumbing work was done to increase capacity if demand is picking up.

The plot size of the facility also allows the installation of a second production line with the extension of the building

which could increase the rated capacity for the plant to 2-2.4 Billion cans per annum.

The Company has a warehousing capacity of 85 million cans in the facility to maintain stocks in line with demand

forecast. The plant is powered by electricity procured from Faisalabad Electric Supply Company. The Company has

an approved electricity connection of 4,790 Kw/H while its requirement is 1,800-2,200 Kw/H. The average power

consumption is c. 25 Kw/H per 1000 cans. Critical equipment are on UPS including PLC system of the plant to save


Page 27 of 138

those from the effects of power outage and power fluctuations. Power factor improvement panels are also installed

to maintain power quality. Faisalabad Industrial Estate Development & Management Company (FIEDMC) is load

shedding free industrial zone except unforeseen shut down or faults either from our associated grid or from national

transmission line. PABC has RLNG & LPG availability to be used in plant burners only. PABC has 3 bullets for LPG of

20 tons each, while RLNG is supplied by Sui Northern Gas Company. The burners are primarily run on RLNG, but as

a backup LPG is also available to be used during shortage of RLNG. The Company has a 6.5 Mega Watt HFO generator

which is being installed currently, as a backup in case of a power breakdown.

3.9. Distribution Network

The Company is in the B2B business; hence, it only has a handful of customers. Most local customers make their own

logistic arrangements where the product is picked up from PABC’s plant through transport arranged by the customer

i.e. ex-works arrangement. PABC also provides paid for delivery services. In this case, PABC arranges the vehicle and

the products are covered under transit insurance. 60% of the volumes sold is through ex-works arrangement, rest

of the volumes are delivered by PABC.

3.10. Local & International Accreditations


Page 28 of 138

PABC places special emphasis on the product quality in order to provide consistency in quality and has acquired

Quality Management and Food Safety Systems certifications by SGS:

Certification Certified Since Validity

ISO 9001: 2015 Re-certification 18 Dec, 2017 17 Dec, 2023

Food Safety System Certification (FSSC 22000)

02 Oct, 2017 01 Oct, 2023

ISO/TS 22002-4 Certification 02 Oct, 2017 01 Oct, 2023

In addition to this, the Company has also successfully passed Food Safety & Technical Audits by PepsiCo and Coca

Cola. PABC’s aluminium 250 ml & 300 ml aluminium beverage cans have been tested for manufacturing and print

quality by PepsiCo’s approved 3rd party packaging laboratory at China and Ball Corporation’s laboratory in the UK.

3.11. PRODUCT PORTFOLIO

PABC presently offers aluminium beverage cans in 250 ml (Slim) and 300 ml (Standard) sizes while it has recently

invested in its ability to produce 330 ml and 355ml (Standard) sizes. The 250 ml size can, owing to the popularity of

smaller packs has a higher share in local production with around three quarters of sales during CY20.

Cans per annum CY18 % CY19 % CY20 %

250ml cans 199,544,530 100% 288,669,251 72% 300,307,847 75%

300ml cans - - 112,517,861 28% 102,757,073 25%

Total 199,544,530 401,187,112 403,064,920

3.12. END USERS, DEMAND FOR THE PRODUCTS AND NAMES OF COMPETITORS

Demand for the aluminium beverage cans is mainly generated from sale of soft drinks and other beverages. Therefore, the customers for the products are beverage bottlers. Since beverages are sold to retail customers, therefore the end user are retail customers purchasing beverages. PABC has no direct local competition in the aluminium beverage cans market in Pakistan. It has a number of indirect competitors in the local beverage packaging market using plastic and glass bottles and carton laminated packaging. Beverage bottlers have a choice to choose between glass, plastic and aluminium packaging for their products. Ecopack and Gatron Industries are PET bottles producers whereas Ghani Glass and Balochistan Glass manufacturers glass bottles.

Indirect Competitors

1. Ecopack Limited

2. Gatron Industries Limited

3. Tetra Pack Limited

4. Ghani Glass Limited

5. Balochistan Glass Limited


Page 29 of 138

3.13. MANUFACTURING OVERVIEW

Aluminium beverage cans are manufactured on the line at PABC at speeds of up to 1,800 cans per minute, 24 hours

a day and 7 days a week. Production is continuous and described in the chart below.

The large coil of aluminium is cut into pre-scrolled sheets. Then, an inside protective coating is placed on the sheets and cured. The sheets are then decorated with whatever printing the customer desires and after that, an over coat of varnish is placed on the decorated sheet and cured. The body sheets are then stacked on pallets for shipment to a fabricating plant. After that, the cylindrical body is formed, the formed cylinder comes from the body maker to the flanger. Here the metal on both ends is rolled to form a flange on each end of the can. This flange will at a later time accept double seaming. One end, top or bottom, depending on customer specifications, is double seamed on the can. A final coating is placed on the interior surface of the can. The final interior coating is baked and cured through a funnel type oven where the time-temperature cycle must be controlled carefully. A 100 percent quality


Page 30 of 138

control inspection for any micro leak is given to every can. Cans are then packed into cartons or placed on pallets for delivery to customers.

3.14. MAJOR CUSTOMERS

PABC has established relationships with all key beverages bottlers in Pakistan & Afghanistan. PABC has agreements

with the Coca Cola bottler in Pakistan & franchisee Afghanistan and PepsiCo franchisees in Pakistan & Afghanistan

that accounted for c. 83% of the sales volume for CY20. PABC exported 35% of their total revenue in CY29CY20 (CY19:

40%) to Afghanistan, while rest of the sales were accounted for local bottlers.

Other major players include Mehran Bottlers (Pakola) in Pakistan and Alokozay Beverages, Afghanistan. PABC enters

into long and short term contracts with its key customers, which are also renewable upon mutual consent. The

contracts with key bottlers are typically for 1-3 years, while PABC also supplies aluminium cans to some of its

customers based on purchase requisitions placed by the bottlers. The contract of Coca Cola is under renewal process,

while supply to the bottlers is being done as routine course of business.

PABC has recently signed contracts to supply aluminium beverage cans to Wild Leaf Beverage Company and Alika

LLC in US and Tajikistan respectively. Major customers along with their contribution is given below:

Customer Origin CY18 % CY19 % CY20 %

Pakistan Beverages Ltd Pakistan 314 15% 971 20% 1,119 22%

Afghanistan Beverages Industry Afghanistan 715 35% 1,218 25% 1,082 21%

Coca Cola Beverages Pakistan Ltd. Pakistan 475 23% 1,028 21% 987 19%

Sukkur Beverages Ltd. Pakistan 148 7% 277 6% 475 9%

Zalal Mowafaq Industrial Co. Ltd Afghanistan - 0% 394 8% 447 9% Habib Gulzar Beverage Ltd. Afghanistan 90 4% 417 9% 365 7%

Total 84% 89% 81%

Other customers accounting for cumulatively 19% of sales of CY 20 include:

Customer Origin

Murree Brewery Pakistan

Nestle Pakistan Pakistan

Sufi Group of Companies Pakistan

Six B Pakistan

Daani International Pakistan King Beverages Pakistan

Master Beverages & Foods Limited Pakistan

Super Cola Beverages Afghanistan

Alokozay Beverages Afghanistan

Afghan Red Pomegranate Afghanistan

3.15. INTELLECTUAL PROPERTY RIGHTS

PABC has no intellectual property rights.

3.16. DETAILS OF MATERIAL PROPERTY

Location Usage Total Areas (in acres)

29 & 30, M-3 Industrial City, Main Boulevard, Sahiawala,

Faisalabad Factory Building 20.92


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The factory building is the only property owned by the Company. The corporate office of the Company is based on rented premises.

3.17. FUTURE PROSPECTS AND DEMAND OUTLOOK

3.17.1 Growth in Soft Drinks Market

Pakistan soft drink markets is expected to grow at a 5-Year CAGR of 6.7%2 from 2020 to 2025 on the back of rising

urbanization, increased consumption and favorable demographics. The growth in beverage market is expected to

lead to an uptick in the demand for the beverage containers. Aluminium beverage can penetration in the beverages

packaging market is still only approximately 3-4%, a growth from the time when cans were imported in Pakistan.

3.17.2 Local Production to Increase Demand of Beverage Cans

Beverage bottlers in Pakistan routinely faced problems with imports of aluminium beverage cans as ordering them

from outside the country entailed long lead times, potential supply availability issues during summer months and

requirements to hold large inventory volumes of empty cans. With the initiation of local production of cans in any

country, it has been observed by can makers around the world that there’s a significant uptick of conversion of PET

and glass containers to aluminium packaging.

The cost for producing the cans is almost similar globally, but the imposition of various duties escalates the cost of

importing the cans in Pakistan. The cost of importing cans is estimated to be $100-$105 per 1000 cans, whereas

PABC’s average selling price range is 20%-25% below the cost of imported cans, making it feasible for the local

beverage bottlers.

3.17.3 Increasing Penetration of Cans in Beverage Packaging

Amid increased environmental concerns and rising issue of plastic waste, there is a global trend of shifting towards

packaging which can be effectively recycled. This is evident from announcements by Nestle, Pepsi, Coca Cola and

others to reduce their use of virgin plastics and use environment friendly packaging with higher recycled content.

PET bottles, though they can be recycled, are expensive to effectively recycle. Their contents also lose carbonation

at a quick pace over time especially in the local climate.

Glass bottles can be reused and effectively recycled but they are energy intensive to make, heavy and fragile.

Beverages cans can be effectively made with high recycled content and are easily recycled. They have an absolute

carbonation barrier and are light in weight.

Given this situation, along with consumer preference for a trendier and fashionable aluminium beverage can, PABC’s

customers are seeing an increased conversion from glass and PET bottles to aluminium beverage cans. This shift is

likely to accelerate in Pakistan with indigenous production in the country due to reduced costs and is expected to

increase can penetration from current levels of 3-4% of total carbonated drinks sales, as per Company estimates.

PABC, being the sole manufacturer of aluminium beverage cans in the country, is expected to continue to capitalize

on the resultant growing demand of aluminium beverage cans in the country.

In addition, any risk of import of aluminium beverage cans in Pakistan currently remains low due to high import and

regulatory duties on imported beverage cans which render them largely uncompetitive when compared to the

pricing offered by PABC.

2 Euromonitor International


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3.17.4 Increase in Export Markets

PABC is currently exporting to Afghanistan and holds majority of market share currently, as per Company’s estimates.

The Company has recently signed agreements with beverage bottlers in Tajikistan and USA.

PABC has also started sales to bottlers in North America and is continuing to explore other markets for export of

aluminium beverage cans particularly to Bangladesh and Central Asia.

The road connectivity to Central Asia, the sea ports and the strategic location of Pakistan allow for exports to high

growth region for beverage bottlers industry.

3.18. VENDORS TO THE COMPANY

Below is a list of suppliers of raw material of Pakistan Aluminium Beverage Cans Limited:

*All numbers calculated on the basis of direct material cost for the corresponding year

In addition, PABC produces decorating inks from DIC Pakistan Ltd, and lubricating chemicals from Akzo Nobel

Pakistan.

The Company has long term (3-year) contract with its key supplier (Novelis) to mitigate the risk of non-availability of

raw material. The Company has procured 94% of total aluminium coils purchased from Novelis during CY20 (CY19:

99%). The contract was initially signed during 2017, which has been renewed in 2020 for three more years. None of

the suppliers are related parties of the Company.

3.19. APPROVALS

PABC has all government and regulatory approval which are required for carrying out business of manufacturing of

aluminium beverage cans.

There are no other approvals required by PABC to conduct the business.

S. No Vendor Name Raw Material Country CY18 CY19 CY20

1 Novelis Aluminium Coils South Korea 63% 60% 58%

2 YANTAI JINTAI INTERNATIONAL TRADE CO., LTD

Aluminium coils China 2% 1% 4%

3 NAFCEL Can Ends China 25% 15% 10%

3 BAO FENG Can Ends China 2% 10% 19%

5 REXAM UNITED ARAB CAN MANUFACTURING COMPANY

Can Ends UAE

2% 0% 0%

6 CAN PACK MIDDLE EAST LLC Can Ends UAE 1% 9% 1%

S. No Type of Approval Approval Granting Authority

Year of Approval Validity

1 Food Business License Punjab Food Authority

2020 2021

2 Environmental approval Environment Protection Department

2019 N/A


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3.20. ASSOCIATED COMPANIES

Name of Company Nature of Relation Shareholding of PABC (Direct / Indirect)

Nature of Business

Ashmore Mauritius PABC Ltd Parent Company 51% Investment Company

Liberty Mills Ltd ( Public Unlisted)

Significant shareholding of Mrs. Hamida Salim Mukaty

36.75%

Textile Industry

Common Directorship of Mr. Zain Ashraf Mukaty

0.0002%

Liberty Power Tech Ltd (Public Unlisted)

Significant shareholding of Mrs. Hamida Salim Mukaty

36.75%

Electrical/Electronic Manufacturing Company

Common Directorship of Mr. Azam Sakrani

0.0002%

Liberty Thar Power (Pvt) Ltd (Private Limited)

Significant Shareholding of Mrs. Hamida Salim Mukaty

36.75% Energy Sector

Oncogen Pharma (Pvt) Ltd (Private Limited)


0.0002% Pharmaceutical

Liberty Wind Power 1 Ltd (Public Unlisted)



Liberty Wind Power 2 Ltd (Public Unlisted)



Liberty Solar Energy ltd (Public Unlisted)

Significant Shareholding of Mrs. Hamida Salim Mukaty

36.75%

Alternate Energy


0.0002%

Providus Capital (Pvt) Ltd (Private Limited)

Common Directorship of Mr. Muhammad Jawaid Iqbal

0.00% Investment Company

Ghandhara Nissan Ltd (Public listed)


0.00% Automobile Manufacturers

Aisha Steel Mills Ltd (Public listed)


0.00% Steel Manufacturers


Page 34 of 138

Name of Company Nature of Relation Shareholding of PABC (Direct / Indirect)

Nature of Business

Tata Textile Mills Ltd (Public listed)


0.00% Textile Manufacturers

Island Textile Mills Ltd (Public listed)



Salfi Textile Mills Ltd (Public listed)



Tata Best Foods Ltd (Public Unlisted)


0.00% Foods processing

Feroze1888 Mills Limited (Public listed)


0.0002% Textile Industry

PABC has no associated companies over which it has control.

3.21. RELATED PARTY TRANSACTIONS

The related parties comprise associated undertakings, Directors of the Company, key management personnel and post-employment benefit plans. The Company in normal course of business carries out transactions with various related parties. Transactions entered with related parties are as follows:

Name Relationship Nature CY18 CY19 CY20

Ashmore Mauritius PABC Limited1 Parent Company

Expenses paid on

behalf of parent

company -h 6.1 0.5

Azam Sakrani CEO Shares Issued

against cash - 0.001 -

Liberty Mills Limited2 Group

Company

Expenses paid on

behalf of associated

company - 0.6 0.7

Provident Fund Employees

Fund Loan Received - 8.1 9.2

Provident Fund Employees Fund

Loan Repaid - 59 -

KIRE AB3 Common

Management

Technical

Consultancy 25.9 1.6 -

All amounts in PKR MN

1.These expenses were paid on behalf of Ashmore Mauritius PABC Limited while they were marketing PABC’s stake to strategic investors

2. These expenses were paid on behalf of Liberty Mills Limited while they were marketing PABC to strategic investors


Page 35 of 138

3. Kire AB is owned by Erik Hoggard who was the CEO of PABC back in 2018. Mr. Hoggard is a well-known technician in can manufacturing industry and provided consultancy with regards to plant operations.


Page 36 of 138

3.22. INDUSTRY OVERVIEW

The global market for beverage packaging is estimated at USD 115.9 Billion in the year 2020, and is projected to reach USD 152.7 Billion by 2027, growing at a CAGR of 4% over the analysis period 2020-20273. Packaging plays an essential role in the widespread distribution of beverages; hence, resulting in increased consumption. Different beverages being packaged in varied materials and sizes reflect upon the sheer size of the market. Also, being a consumption-driven market, the demand for the same has been rising significantly. Major drivers for the same have been growing disposable income, urbanization, and changing lifestyles.

The beverage packaging sector (including carbonated & non-carbonated beverages) is divided into 4 kinds of materials. The largest segment within the global industry is paper and board which occupies c. 34% of the market. Flexible plastic and rigid plastic (PET) have market shares of c. 22% and c. 17%, respectively. Metal occupies c. 11% of the total market while glass has a market share of c. 6%.4

PET Bottles

Plastics are a material made of synthetic polymers which comes from crude oil. Oil extraction and processing has a very high carbon footprint (and ecological footprint in general). As much as 45% of the total emissions of this material is associated with obtaining the raw material for the production of plastic packaging5.

The most commonly used plastic for beverage packaging is PET. It is relatively cost efficient, but its disposal and insufficient recycling are seen by many observers to be at the heart of the global plastic waste problem. Even though plastic packaging is increasingly recycled, it is still a relatively small percentage. Only 30% of the plastic is recycled in the world6. The other amount goes to landfills (and the rest is used, for example, for energy production). Plastic stored in this way takes about 400 years to decompose and is largely shredded into a very harmful micro plastic. Moreover, it is still more cost-effective to produce new packaging than recovering those that are in circulation. Generally, recyclability of PET and use of recycled plastic is lower compared to glass and metal. Another factor that is important is that PET packaging has a relatively lower shelf life for carbonated soft drinks.

Glass Packaging

Glass is easily recyclable and non-toxic to the environment. Just like aluminium and plastic, unless it is recycled it is made of non-renewable raw materials like sand, limestone and silica. Glass is energy intensive to produce even if recycled materials are used. Glass bottles can be reused in a returnable glass system, but need extensive cleaning process, have high transportation costs due to its weight and its fragility outweighs its benefits. It is estimated that the carbon footprint of a glass bottle is on average the highest among all types of beverage packaging7.

Beverage Cartons

Cartons are made with layered paperboard, polyethylene and aluminium sheets and generally used in a large variety of retail and consumer products (including non-carbonated drinks & juices). While it is recyclable, it is difficult to do so as the polyethylene and aluminium layers need to be disintegrated.

Aluminium Beverage Cans

Unlike plastic, aluminium beverage cans are economic to recycle and are widely recycled. Aluminium beverage can be recycled an unlimited number of times and 75% of all aluminium ever produced in the USA8, is still being used. This is why used aluminium beverage cans have the highest recycling percentage, with as much as 76.1% in 2018 of

3 https://www.researchandmarkets.com/reports/1824108/beverage_packaging_global_market_trajectory_and 4 https://pacra.pk/sector_research/Paper%20and%20Packaging%20Sector%20PACRA_1604587222.pdf 5 European Commission 2013: Recycled plastic reduces carbon footprint of packaging [in:] Science for Environment Policy 6 Onstad E., 2019: Plastic bottles vs. aluminium cans: who’ll win the global water fight? Reuters 7 Gujba H., Azapagic A., 2011: Carbon Footprint of Beverage Packaging in the United Kingdom. Towards life cycle sustainability management, 10 8 https://www.aluminum.org/industries/production/recycling


Page 37 of 138

them were recovered in Europe9 and 97.6% in Brazil10. Recycling aluminium uses 95% 11less energy than producing it directly from bauxite. As per the Aluminium Association, it just takes 8% of the energy to produce aluminium from recycled material versus producing new aluminium.

Aluminium beverage cans are the primary choice for packaging of single serve carbonated and non-carbonated beverages such as sodas, beer, cider, fruit juices, and other caffeinated beverages. They are easy to shape and easy to print. Compared to other containers, the barrier to air, light and moisture is stronger, and the transportation and maintenance costs are lower.

According to MarketsandMarkets (an independent market research firm)12, the global food & beverage metal cans market is estimated to be valued at USD 27.6 Billion in 2020 and is projected to reach USD 37.0 Billion by 2025, recording a CAGR of 6.1%.

Cost comparison between aluminium, PET & glass beverage containers:

By analyzing segment sales for leading packagers relative to unit production volume, PET bottles hold a cost advantage over other beverage containers. In competing with low cost plastic, can makers have focused on the environmental benefits of the aluminium can, such as high recycling rates and limited waste footprint.

Emerging Trends in Beverage Packaging Market

PET bottles hold a cost advantage over other types of beverage containers, priced almost 15 - 20% lower than aluminium beverage cans while almost half the cost of glass packaging. Cans are slowly replacing PET packaging due to increased regulatory and environmental scrutiny; and cans are replacing glass packaging due to high transportation, return and cleaning/recycling cost making it uneconomical.

This can be validated by the fact that Nestle Pakistan in a press release dated January 201913, as a part of their global strategy, stated that the issue of packaging waste, particularly plastic waste is of public concern and they “envision a future without waste, and this means not only increasing plastic recycling but also identifying alternatives, whether in the form of delivery systems or materials”. They “are eliminating unnecessary packaging and phasing out materials

9ttps://www.european-aluminium.eu/media/3013/2020-12-16-european-aluminium-mpe-aluminium-beverage-can-2018-recycling-rate_press-

release.pdf 10 According to ABAL, the Brazilian Aluminum Association, and ABRALATAS, the Brazilian Association of Can Manufacturers 11 https://www.aluminum.org/aluminum-can-advantage 12 https://www.marketsandmarkets.com/PressReleases/food-cans-market.asp 13 https://www.nestle.com/media/pressreleases/allpressreleases/nestle-action-tackle-plastic-waste


Page 38 of 138

that are not recyclable or are hard to recycle. Investing more in the development of mono-material packaging, as well as alternative materials and new refill/reuse systems” shaping a waste free future.

In addition to this Coca Cola also announced “a robust pipeline of sustainable packaging innovations in support of The Coca-Cola Company’s global “World Without Waste” goal to make its bottles and cans with an average of 50 percent recycled material by 2030. Updates to DASANI’s packaging line-up are designed to reduce plastic waste and increase the use of recycled and renewable materials in the United States, while ensuring that all DASANI bottles continue to be fully recyclable” in a press release dated August 201914.

PepsiCo announced in June 20192019 15 , “The company's AQUAFINA® water brand will also offer aluminium beverage can packaging in U.S. food service outlets, while the brand tests the move in retail. The changes, which all go into effect next year, are expected to eliminate more than 8,000 metric tons of virgin plastic and approximately 11,000 metric tons of greenhouse gas emissions, representing the latest ambitious steps in the company's sustainability journey and pursuit of a circular economy for plastics. They reinforce and advance PepsiCo's goals by 2025 to make 100% of its packaging recyclable, compostable, or biodegradable and use 25% recycled plastic content in all its plastic packaging.”

Pakistani industry is also following the global trend which can be proven by the fact that a number of new players are investing in aluminium beverage can filling lines and introducing aluminium beverage can packaging for their products; these include Rooh Afza, Mehran Bottlers and Master Cola. Moreover, Sukkur Beverages installed an aluminium beverage can filling line in CY18 while Pakistan Beverages upgraded its filling line to a higher speed.

Presently PET and paperboard containers are used in juice packaging. However, increasingly many local brands have started supplying juices in aluminium beverage cans such as Fruti juices by King Beverages. Rani Floats (Coca Cola International) and Daani International’s juices are popular locally and available in their signature aluminium beverage cans.

The recyclability of aluminium beverage cans add to its appeal in single-use beverage containers. On average, aluminium beverage cans comprise of almost 70% of recycled content compared to PET and glass which include c. 3% and c. 23% of recycled materials respectively. Also, consumers are more likely to recycle aluminium beverage containers compared to glass PET and Glass. Almost c. 50% of the aluminium beverage containers are recycled while 30% of PET and c. 40% of glass is recycled16, as per the Aluminium Association. Furthermore, cans made from recycled aluminium are less energy-intensive, requiring only 8% of the energy needed to produce a new can.

Pakistan Beverage Packaging Market

Pakistan’s beverage packaging sector is largely dominated by PET and glass bottles particularly for carbonated drinks owing to lower cost and easy availability due to local manufacturing of the material while the juices/packaged milk segment relies upon PET and layered carton packaging.

Currently there are no direct local competitors of PABC in aluminium beverage cans manufacturing industry, however PET packaging players like Gatron Industries & Ecopack and glass bottle manufacturers like Ghani Glass are indirect competitors of the Company.

Although the statistics for Pakistan’s beverages packaging sector are not formally available, the Company estimates the total demand of the country to be around 250-300 Million cans per annum. PABC is the sole manufacturer of aluminium beverage cans in Pakistan fulfilling the industry demand.

Demand Drivers

The main drivers of demand for the aluminium beverage cans market is the growth of soft drinks consumption, rising urbanization, increased awareness regarding environment sustainability resulting in conversion of use of PET packaging to aluminium beverage cans.

14 https://www.coca-colacompany.com/press-releases/dasani-takes-steps-to-reduce-plastic-waste 15 https://www.pepsico.com/news/press-release/pepsico-advances-circular-economy-for-plastics-announces-lifewtr-packaging-with-06272019 16 https://www.aluminum.org/aluminum-can-advantage


Page 39 of 138

Growth in Carbonated Soft Drinks market of Pakistan

The current off trade17 market size of soft drinks is 3.13 Billion liters per annum and is expected to grow to 4.3 Billion liters per annum at CAGR of 6.7% on volume basis, as per Euromonitor International. Until 2025, the carbonated soft drinks market in Pakistan is forecast to reach 2.53 Billion USD (CY20 : 2.46 Billion USD (in retail prices), thus increasing at a CAGR of 5.61% per annum for the period 2020-2025.18

Conversion to can packaging

Current can penetration is estimated to be between 3-4% in the Pakistani market which is expected to grow on the back of the commitments to reduce plastic use by most of the large beverage bottlers in the world.

Cost Components

Aluminium coils and can-ends are the key items for can manufacturing, accounting for approximately 60% and 30% of the total direct material costs respectively. The prices for aluminium coils and can ends are indexed to the London Metal Exchange (“LME”) aluminium prices. The LME price fluctuations are passed on to customers – essentially hedging the Company from risk of increasing raw material prices.

Regulatory duties & tariffs also a play major part in the cost of landed aluminium beverage cans if they were to be imported into the country. As per CUSTOMS RULES, 2001 (S.R.O.450(I)/2001, DATED 18.6.2001), the duty structure is given below:

H.S Code No. 7612.9030 4805.9390 3209.9090

Particulars Finished Cans Layer Pads Chemicals

Customs Duty 20% 20% 20%

Additional Custom Duty 7% 7% 7%

Additional Sales Tax 3% - -

Regulatory Duty 10% - 5%

Aluminium coils and can lids have a customs duty of 5% as per custom’s tariff, but PABC has exemption/reduction in

duty under IOCO quota valid until 30th June 2021, which is subject to renewal. Profitability of the Company may be

affected if renewal is not granted or there is an increase in the current duty structure. The renewal is granted for the

last two years, so the Company expects that it will be renewed.

17 The off-trade market includes all retail outlets like hypermarkets, supermarkets, convenience stores, mini markets, kiosks etc. 18 https://www.marketresearch.com/Williams-Marshall-S]trategy-v4196/Pakistan-Carbonated-Soft-Drinks-Impact-13626025/

0

1,000

2,000

3,000

4,000

5,000

Soft Drinks Market of Pakistan (Million Litres)


Page 40 of 138

3(A) SHARE CAPITAL AND RELATED MATTERS

No. of shares

Shareholders Face

Value (PKR)

Premium

(PKR) Total (PKR)

AUTHORIZED CAPITAL

400,000,000 Ordinary Shares of PKR 10/-

each 10

- 4,000,000,000

ISSUED, SUBSCRIBED, &

PAID UP CAPITAL

361,108,254

Issued for Cash/Non Cash:

Ordinary Shares of PKR. 10/-

each

10

- 3,611,082,540

Capital Reserve – Share

Premium19 10

7.22 810,040,795

ISSUED, SUBSCRIBED & PAID-UP CAPITAL WITH SHARE PREMIUM OF PABC IS HELD AS FOLLOWS:

No. of

shares

% Shares held by Directors/

Sponsors of the Company

Paid up Capital

(PKR)

Share

Premium

(PKR)

Total (PKR)

184,162,625 51.0% Ashmore Mauritius PABC

Limited

1,841,626,250 - 1,841,626,250

132,707,283 36.7% Hamida Salim Mukaty 1,327,072,830 607,528,796 1,934,601,626

44,234,620 12.3% Muhammad Salim Mukaty 442,346,200 202,504,783 644,850,983

613 0.01% Zain Ashraf Mukaty 6,130 3,608 9,738

613 0.01% Azam Sakrani 6,130 3,608 9,738

500 0.01% Ejaz Ahmed 5,000 - 5,000

500 0.01% Muhammad Abdullah Yusuf 5,000 - 5,000

500 0.01% Simon Michael Gwyn

Jennings

5,000 - 5,000

500 0.01% Alexandra Frances Autrey 5,000 - 5,000

500 0.01% Muhammad Jawaid Iqbal 5,000 - 5,000

361,108,254 Total Equity Capital 3,611,082,540 810,040,795 4,421,123,335

PRESENT OFFER OF ORDINARY SHARES

No. of

shares

Allocation Face Value (PKR)

Premium*

(PKR) Total (PKR)

70,416,000

Allocations to Institutions /

Individual Investors through

Book Building process at

Strike Price

10

25 2,464,560,000

23,472,000 General Portion 10 25 821,520,000

93,888,000 Total Offer size 10 25 3,286,080,000

*At floor price

19 The share premium pertains to 112,247,430 shares issued to Liberty Group under share subscription agreement dated December, 2015


Page 41 of 138

3(A) 1. Sale of 25% shares by Ashmore Mauritius PABC Limited through private placement

Funds managed by Ashmore Investment Management Limited (and its affiliates) set up Pakistan Aluminium

Beverage Cans Limited to develop the project and has delivered its initial targets of achieving a steady state

production and profitability. Typical of any private equity strategy, Ashmore Mauritius PABC Limited is now exiting

from the investment in PABC to realize the returns delivered on this investment.

As per part of their strategy, Ashmore Mauritius PABC Limited (“Seller”) has entered into agreements to sell

90,274,625 shares i.e. 25% of the paid up capital of Company to Mrs. Hamida Salim Mukaty (part of Liberty Group)

and Soorty Enterprises (Private) Limited (together referred to hereinafter as “Purchasers”) by way of private

placement (both agreements are referred to as “Private Placement”).

The Seller has entered into a Share Purchase Agreement (“SPA 1”) dated 22nd April 2021 with existing Sponsor Mrs.

Hamida Salim Mukaty to acquire additional 18,052,974 Ordinary Shares at a price of PKR 30.80 per share constituting

approximately 5% of paid up capital of the Company.

In addition to the above, the Seller has also entered into a Share Purchase Agreement (“SPA 2”) dated 22nd April

2021 with Soorty Enterprises (Private) Limited to acquire 72,221,651 Ordinary Shares i.e. approximately 20% of the

issued and paid up share capital of the Company at a price of not less than PKR 31.85 per share.

The price of Private Placement is below the Offer Price of this Offer for Sale is due to the lock-in period of Sponsors

as explained in section 3 (A) 2. Transfer of shares to Mrs. Hamida Salim Mukaty and Soorty Enterprises (Private)

Limited would be done along with the transfer of OFS shares, subject to the Purchasers obtaining approval in respect

of the transaction from the CCP under the Competition Act, 2010 and successful completion of this Offer for Sale.

Since the Private Placement is contingent upon OFS, therefore in case, if for any unforeseen reason, the OFS does

not materialize, the Private Placement will also not be consummated.

As per the definition of Sponsor laid out in PO Regulations, the shares sold under Private Placement will be classified

as Sponsor shares and the lock in period for Sponsors as given under regulation 5 (1) and 5 (2) will be applied on

them. In case, the Private Placement is not concluded for any reason whatsoever, the Ashmore Mauritius PABC

Limited will continue to hold these shares and will remain classified as Sponsors.

3(A) 2. Sponsors shares to be kept in blocked form

Given below are Sponsor shareholding to be kept in blocked form as per the above mentioned regulations:

Sponsors of the Company after completion of OFS excluding the impact of Private Placement:





Zain Ashraf Mukaty 613 6,130

Total 267,217,141 74.00%

Sponsors of the Company after completion of OFS including the impact of Private Placement



Soorty Enterprises (Private) Limited 72,221,651 20.00%



Total 267,217,141 74.00%


Page 42 of 138

NOTE:

1. As per regulation 5(1) of the PO Regulations, the Sponsors of the Company shall retain their entire shareholding in the Company for a period of not less than twelve months from the last date for public subscription;

2. As per regulation 5(2) of the PO Regulations, the Sponsors of the Company shall retain not less than twenty-five percent of the paid up capital of the Company for not less than three financial years from the last date for the public subscription;

3. As per regulation 5(3) of the PO Regulations, the shares of the Sponsors mentioned at (1) and (2) above shall be kept unencumbered in a blocked account with central depository;

4. Subject to compliance with sub-regulation 1 and 2 of regulation 5 of the PO Regulations and with the prior approval of the securities exchange, the Sponsors of the Company may sell their shareholding through block-sale to any other person who shall be deemed Sponsor for the purposes of the PO Regulations.

3(A) 3. Present Offer

The Offer comprises of 93,888,000 Ordinary Shares of face value worth PKR 10/- each i.e.; 26% of the existing paid up capital of PABC offered by Ashmore Mauritius PABC Limited who is Sponsor of Pakistan Aluminium Beverage Cans Limited.

The entire Offer of 93,888,000 Ordinary Shares will be offered through the Book Building process at a Floor Price of PKR 35/- per share. Initially, 75% of the Offer size i.e. 70,416,000 Ordinary Shares will be allotted to successful Bidders and 25% of the Offer i.e. 23,472,000 Ordinary Shares will be offered to retail investors. Unsubscribed shares, if any, of the general subscription portion will be allocated to successful Bidders of the Book Building Portion on a pro-rata basis.

The Floor Price of PKR 35/- has a maximum Price Band of 40%, above which no Bid shall be accepted. At maximum Price Band, the highest Strike Price that can be Bid for shall be PKR 49/- per share.

3(A) 4. Shares Issued in Preceding Years

S. No No. of Shares Issued Consideration Total Value (PKR) Date of Issuance / Allotment

1 20,000,000 Cash/Non Cash20 200,000,000 4th December 2014

2 96,829,998 Cash/Bank 968,299,980 26th February 2016

3 112,248,430 Cash/Bank 1,122,474,300 14th March 2016

4 38,724,091 Cash/Bank 387,240,910 1st November 2016

5 26,537,735 Cash/Bank 265,377,350 14th November 2017

6 66,768,000 Cash/Bank 667,680,000 15th July 2019

Total 361,108,254 3,611,082,540

Other than the above mentioned shares, there has been no issuance of shares since incorporation of the Company.

20 2.663 Million shares were issued to Ashmore Mauritius PABC Limited against pre-commencement expenses incurred by them.


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3(A) 5. Related Employees of the Company

Related Employees mean such employees of the Company, the Offeror, the Book Runner, and the Lead

Manager/Consultant to the Issue, who are involved in the Offer.

Related Employees of the Company (Pakistan Aluminium Beverage Cans Limited)

S. No Name Designation

1 Azam Sakrani Chief Executive Officer

2 Adnan Shaikh Chief Financial Officer & Company Secretary

3 Obaid ur Rehman Commercial Finance Manager

4 Muhammad Shehroze Deputy Manager Finance

Related Employees of the Offeror i.e. Ashmore Mauritius PABC Limited


1 Ahsan Ali Head of Private Equity

2 Hamad Aslam Portfolio Manager

This includes employees of Ashmore Investment Management Limited (or an affiliate)

Related employees of the Lead Manager and Book Runner (Arif Habib Limited)


1 Shahid Ali Habib Chief Executive Officer

2 Syed Saquib Ali Director, Investment Banking

3 Ahmed Rajani Director, Investment Banking

4 Ammad Tahir Assistant Vice President, Investment Banking

5 Syed Ali Ahmed Sr. Associate, Investment Banking

6 Muhammad Ali Raza Associate, Investment Banking

7 Daniyal Ahmed Khan Associate, Investment Banking

8 Tooba Zafar Associate, Investment Banking

9 Raveena Kumari Associate, Investment Banking

10 Noor Muzaffar Senior Analyst, Investment Banking

11 Saim Ahmed Shahab Senior Analyst, Investment Banking

Note:

1. As per regulation 7(9) of the PO Regulations the associates of the Lead Manager and the Book Runner shall not in aggregate make Bids in excess of ten (10%) percent of the shares offered through Book Building. Provided that it shall not apply to such associates of the Lead Manager and the Book Runner that are Financial Institutions Mutual Funds and Insurance Companies

2. As required under regulation20 (10) of the PO Regulations, Related Employees of the Company, Offeror, Lead Manager and Book Runner to the Issue shall not participate in the Bidding for shares.


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4 PRINCIPAL PURPOSE OF THE OFFER

4.1. PRINICPAL PURPOSE OF THE OFFER

The principal purpose of the Offer for Sale of Shares is to divest Ashmore Mauritius PABC Limited, shareholding in

the company through capital market and list the company at Pakistan Stock Exchange Limited.

Ashmore Mauritius PABC Limited, typical of any private equity strategy is divesting its shareholding to realize returns

delivered on their investment in PABC through a combination of this Offer for Sale and Private Placement (Details of

which is given in Section 3(A) 1).


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4(A) VALUATION SECTION

The Ordinary Shares of Pakistan Aluminium Beverage Cans Limited are being offered at Floor Price of PKR 35/- per share which is at a premium of PKR 25/- per ordinary share to the face value of PKR 10/- per Ordinary Share. The Lead Manager has reviewed the business performance of the Company and in their opinion the Floor Price of PKR 35/- per share is justified based on:

4(A) 1. Successful Operational History

PABC started its operation in June 2017 with an effective capacity to produce 600 Million cans per annum. Within

its third full year of operations i.e. CY20, the Company produced 444.3 Million cans translating into capacity

utilization of 74%, despite slowdown in overall demand due to COVID-19. This is due to strong demand of the

products of the Company that it was able to penetrate the Pakistan aluminium beverage cans market swiftly. In

addition to capturing the local market, PABC has established its foothold in Afghanistan’s market capturing majority

of the market share and supplying to all key bottlers in the country. Initially, the spoilage of material was of a concern,

hovering around 13% in CY18, but due to continuous efforts on process efficiency it has been brought down to

international standards of 2.4% in CY20. The Company obtained Quality Management and Food Safety Systems

certifications by SGS i.e. ISO 9001: 2015 Certified, ISO 22000: 2005 Certified and ISO/TS 22002-4 Certification.

4(A) 2. Financial Performance

PABC has shown strong growth in terms of sales and has been able to achieve a sales mark of PKR 5 Billion within

third full year of its operations despite a period of lockdown and border closures due to Covid-19. The gross margins

and net margins have also shown exponential growth.

PABC has shown strong growth in the first 4 months of the current year. PABC’s saw volumetric growth in revenue

resulting in in better gross margins. The further reduction in finance cost has been instrumental in increasing net

profit margins.

Audited Audited Audited Management

CY18 CY19 CY20 4MCY21

Total Cans Sold (Mn Units) 200 401 403 198

Revenue (PKR Mn) 2,057 4,809 5,084 2,591

Gross Profit Margin (11%) 22% 30% 34%

Operating Profit Margin (25%) 18% 22% 28%

Net Profit (PKR Mn) (799) 147 610 596

Net Profit Margin (39%) 3% 12% 23%

Return on Equity (46%) 6% 19% 16%

-219

1,074 1,542

-11%

22%

30%

-20%

-10%

0%

10%

20%

30%

40%

-500

500

1,000

1,500

2,000

CY 18 CY 19 CY 20

Gross Profit (PKR Mn) & Margin

Gross Profit Gross Margin (%)

2,057

4,809 5,084

1,000

2,000

3,000

4,000

5,000

6,000

7,000

CY 18 CY 19 CY 20

Sales (PKR Mn)


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4(A) 3. Diversified Customer Base

The Company has established relationships with the key beverage bottlers in Pakistan & Afghanistan such as

franchisees of PepsiCo, Coca Cola, Mehran Bottlers (Pakola) and Zalal Mowafaq, Afghanistan. In addition to this,

Company also supplies aluminium beverage cans to Nestle Pakistan, Murree Brewery, King Beverages, Super Cola

Beverages, Sufi Group of Companies, Six B, Daani International, Master Beverages & Foods and Afghan Red

Pomegranate.

Customer Origin CY18 % CY19 % CY20 %

Pakistan Beverages Ltd Pakistan 314 15% 971 20% 1,119 22%

Afghanistan Beverages Industry Afghanistan 715 35% 1,218 25% 1,082 21%

Coca Cola Beverages Pakistan Ltd. Pakistan 475 23% 1,028 21% 987 19%

Sukkur Beverages Ltd. Pakistan 148 7% 277 6% 475 9%

Zalal Mowafaq Industrial Co. Ltd Afghanistan - 0% 394 8% 447 9%

Habib Gulzar Beverage Ltd. Afghanistan 90 4% 417 9% 365 7% Total 84% 89% 81%

4(A) 4. Future Prospects

The sale of aluminium beverage cans is dependent upon the sale of soft drinks & other beverages. The soft drinks

market of Pakistan is expected to grow at a 5-year CAGR of 6.7% as per Euromonitor International during the period

2020-2025 on the back of rising urbanization, favorable demographics and increased consumption. As per Company

estimates, the can penetration in the beverage packaging market is roughly 3-4%. As part of a global trend to move

away from PET packaging due to environmental concern, the Company’s management expects that can penetration

will likely increase. This shift may benefit the Company as it is the sole manufacturer of aluminium beverage cans in

Pakistan.

4(A) 5. Export Potential

Pakistan Aluminium Beverage Cans Limited exported c. 35% of their total sales to leading beverage producers in

Afghanistan during CY20.

In addition to Afghanistan, PABC has started supplying aluminium beverage cans to beverage producers based in

Tajikistan and US, while also exploring the possibilities to cater to other South Asian and Central Asian markets.

4(A) 6. Post OFS Free Float Disclosure

The free float status post OFS is presented in the below table:

Description Number of shares % Shareholding status

-799

147610

-39%

3%

12%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

-1,000

-500

500

1,000

CY 18 CY 19 CY 20

Net Profit (PKR Mn) & Margin

Net Profit Net Profit Margin (%)

-504

843 1,120

-25%

18%

22%

-30%

-20%

-10%

0%

10%

20%

30%

-1,000

-500

500

1,000

1,500

CY 18 CY 19 CY 20

Operating Profit (PKR Mn) & Margin

Operating Profit Operating Margin (%)


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Held by Sponsors and Directors 267,220,254 74%

Held by General Public – Free Float 93,888,000 26%

Total 361,108,254 100%

4(A) 7. Peer Group Analysis

There are no direct competitors of PABC in aluminium beverage packaging sector. Peer group analysis of listed

packaging companies is given below:

Company

2Share Price

3LTM EPS

LTM P/E

4BVPS P/B 5ROE 6ROA Free

Float %

Beverage Packaging

Ecopack Limited 32.63 1.62 20.1x 21.37 1.5x 8% 3% 80%

Gatron Industries 425.5 34.6 12.3x 146.17 2.9x 24% 11% 5%

Ghani Glass Limited 48.56 4.39 11.1x 21.77 2.2x 20% 9% 25%

Balochistan Glass Limited 14.18 -0.5 N/A 10.18 1.4x N/A N/A 25%

Tripack Films Limited 174 30.01 5.8x 354.17 0.5x 8% 9% 35%

Average 12.3x 1.7x 15% 8%


35.001 1.78 19.7x 9.85 3.6x 18% 7% 26%

Non- Beverage Packaging

Century Paper 106.22 13.5 7.9x 55.23 1.9x 24% 12% 35%

Cherat Packaging 203.96 0.7 291.4x 280.38 0.7x 0% 0% 60%

Merit Packaging 15.26 -8.59 N/A 2.72 5.6x N/A N/A 45%

Packages Limited 480 31.55 15.2x 485.96 1.0x 6% 5% 25%

Roshan Packages 27.16 1.06 25.6x 42.08 0.6x 3% 2% 31%

Siddiqsons Tinplate 15.92 0.95 16.8x 12.33 1.3x 8% 3% 25%

Average 71.4x 1.9x 8 % 4%

*N/A represents companies with negative earning

1. Floor price of the Offer

2. Share prices other than PABC on 21st May 2021

3. Last Twelve month earning

4. Book value as at 31st March 2021


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5. ROE is calculated by dividing last twelve months profit after tax with total equity as at December 31, 2020

6. ROA is calculated by dividing last twelve months’ profit after tax with total assets as at December 31, 2020

4(A) 8. Justification

Based on our review, the Lead Manager is of the opinion that the historical performance of the Company, diversified

customer base and the demand for their products indicates sustainability of business performance in the future.

The shares of the Company are being offered at a Floor price of PKR 35.00 per share while the Book value per share

of the Company as at December 31, 2020 is PKR 8.71.


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5 RISK FACTORS

INTERNAL RISK

5.1.1 Business Risk

Sales volume and profitability might be adversely impacted due to a decrease in demand of the Company’s product.

Since demand of the Company’s product is dependent on consumption of beverages, any adverse movement in

beverages sales stands to be a key business risk for the Company. PABC’s sales also follow a seasonal pattern with

higher degree of sales observed in summer months, hence any business disruption in summer months will have a

higher impact on Company’s sales when compared to rest of the year.

The Company is vulnerable to fluctuations and price of raw materials (mainly aluminium). PABC mitigates this risk

by negotiating agreements to pass on costs of aluminium to beverage bottlers.

5.1.2 Revenue Concentration Risk

Revenue concentration risk is a risk arising from the revenue being dependent upon few large buyers. PABC has

almost 83% of the volume being sold to key customers (PepsiCo. franchisees & Coca Cola Pakistan and its franchisee

in Afghanistan combined) during CY20. 19% of the revenue is coming from the cans sold to Coca Cola Beverages

Pakistan Ltd while Pakistan Beverages Ltd. accounts for c. 22% of the revenue. Afghanistan Beverage Industries

Limited (“ABI”), the sole franchisee of PepsiCo. International in Afghanistan, is also a significant customer that

accounts for 21% of the revenue of the Company.

The Company has long term contracts with its key customers, while it is also working towards diversifying customer

base by exploring different export markets and increasing foothold in the local industry; however, the loss of a major

customer or customers can significantly affect the profitability of the Company.

5.1.3 Vendor Concentration Risk

PABC relies upon Novelis for supply of aluminium coils. The Company has procured 94% of the total aluminium coils

from Novelis in FY 2020 (99% in FY 2019). Aluminium coils are the main raw material for the Company. Any supply

disruption or cancellation of agreement may affect the operations of the Company.

The Company hedges this risk by entering into long term contracts with its key suppliers.

5.1.4 Operational Risk

Operational risk is the prospect of loss resulting from unforeseen machinery breakdown, inability to access supplies

and transport, power and utility outages, inability to access highly trained local and international support and experts,

inadequate or failed procedures, systems (including computers systems and software malfunction and security

threats) or policies and poor operation which can hurt an organization's reputation, cause for financial damage, its

relationship with its stakeholders, and shareholder value.

The Company has qualified & experienced management teams overseen by a diverse Board of Directors with

international experience and have designed the organization’s SOPs to mitigate all such risks. Company has obtained

Food Quality Management and Food Safety Systems certifications by SGS. In addition to this, the Company has also

successfully passed the Food Safety & Technical Audit by PepsiCo and Coca Cola . PABC’s two-piece aluminium 250

ml & 300 ml aluminium beverage cans have been tested for manufacturing and print quality by PepsiCo approved

3rd party packaging laboratory at China and Ball Corporation’s laboratory in the UK.


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5.1.5 Net Losses in CY18

The Company incurred net losses during CY18, since it was its first year of commercial operations. The experienced

management of PABC has been able to turn around the Company in CY19 profitable, and it has been profitable ever

since.

5.1.6 Liquidity Risk

Liquidity risk is the uncertainty for the Company to meet its financial obligations due to insufficient liquid assets. If

PABC is unable to service its debt obligations in a timely manner or comply with various financial and other covenants,

business prospects, results of operations and financial condition may be adversely affected. The management

reviews receivables and inventory in hand on weekly basis to mitigate liquidity risk. The current ratio of the Company

stands at 1.18 depicting that Company is fairly liquid.

5.1.7 Credit Risk:

Credit risk is the possibility of a loss resulting from a borrower's failure to repay a loan or meet contractual obligations.

The Company’s Debt Service Coverage Ratio is 2.65x, showing that company’s operating income is sufficient to pay

off it’s debt obligation.

5.1.8 Supply Chain risk:

The Company may be vulnerable to fluctuations in the supply of raw materials (mainly aluminium) due to any

unforeseen circumstances i.e. border closures due to Covid-19. PABC mitigates this risk by entering into long term

contracts for procurement of its key materials.

5.1.9 Risk of Non-Compliance with regulations of SECP and PSX

In the event of non-compliance with any regulatory requirements of SECP or PSX, the Company may be placed on

Defaulter Segment of PSX which may potentially hamper trading in the Company’s shares leading up to potential

suspension in trading as well.

5.1.10 Covenants in the Syndicated Term Financing Agreement

The Company has procured PKR 2.1 Billion from a syndicate of banks led by Faysal Bank Limited. ( Details are

disclosed in section11.1.2). The Company cannot pay or declare any dividends, distribution of profit in respect of its

share capital or subordinated loans by its shareholders, if a Termination Event has occurred and/or is continuing.

5.1.11 Covenants due to Debt Relief Scheme by State Bank of Pakistan

PABC availed the loan extension and restructuring package “Debt Relief Scheme” announced by State Bank of

Pakistan, as part of the steps taken to dampen the effects of Covid-19. As part of the agreement, PABC has a

restriction to issue any dividends during the tenor of the relief (deferral/restructuring tenor) i.e. until Aug. 2021.

EXTERNAL RISK

5.1.12 COVID-19 Risk

As the Company’s sales is dependent upon sale of carbonated drinks & juices which are retail products, any Covid

related lockdowns/restrictions may adversely affect the sales of beverage bottlers and related businesses. Since the

Company imports its raw material, any border closures due to Covid-19 may affect the procurement of raw materials.

Any industrial lock down announced by Government of Pakistan will result in factory closure and may temporarily

affect the production capability of the Company.

Because the COVID-19 pandemic is far-reaching and its impacts cannot be completely anticipated, additional risks

may arise that could materially impact the Company’s financial results and liquidity.


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5.1.13 Economic Slowdown

An economic slowdown occurs when the rate of economic growth slows in an economy. Slow down and/or

deterioration of macroeconomic conditions as a whole could trigger reduction in disposable incomes and affect

consumer discretionary spending. Thus, compelling consumers to switch to cheaper options to meet staple

requirements. An economic slowdown may adversely affect the growth and performance of the beverage and allied

sector as a whole.

5.1.14 Relationship with Afghanistan

Since 35% of the revenue of the Company is dependent upon sales to Afghanistan based clients, any volatility in the

relationship between Pakistan and Afghanistan or internal (political, economic, law & order) change in Afghanistan

may adversely affect the Company and its profitability

5.1.15 Interest Rate Risk

Interest rate risk is the movement of interest rates that may negatively impact the business. The Company has

financing facilities of PKR 4.5 Billion as of the end of CY20. Any unforeseen increase in interest rates will increase the

cost of borrowing for the Company and may affect its profitability, as existing debts are based on floating rate.

5.1.16 Currency Risk

The Company’s products prices are USD denominated as part of customer contracts, hedging the currency risk for

the Company. The Company’s main supplies are priced in USD. The Company requires regular and unfettered access

to Foreign Currency to maintain its operations. All the imports are done through Letter of Credit issued by banks.

5.1.17 Regulatory Framework/Duty Structure

The Government plays a major regulatory role and is responsible for enforcing laws & regulations. Major regulatory

control pertains to the imposition of custom duties on aluminium and related industry. A reduction in custom &

regulatory duties on import of cans may result in higher influx of imported cans leading to a loss of market share for

the Company.

Other Changes in laws and governmental regulations may adversely affect PABC’s business and operations. For

example, any imposition of Environmental Charges may result in higher cost of production for PABC while imposition

of Sugar Taxes will increase the price of beverages for end consumer which may have a negative impact on sales.

Current duty structure is as follows:

H.S Code No. 7612.9030 4805.9390 3209.9090

Particulars Finished Cans Layer Pads Chemicals

Customs Duty 20% 20% 20%

Additional Custom Duty 7% 7% 7%

Additional Sales Tax 3% - -

Regulatory Duty 10% - 5%

Aluminium coils and can lids have a customs duty of 5% as per custom’s tariff, but PABC has exemption/reduction in

duty under IOCO quota valid uptil 30th June 2021, which is subject to renewal. Profitability of the Company may be

affected if renewal is not granted or there is an increase in the current duty structure. The Company has been granted

renewal in the last 2 years and expects that it will be renewed in the upcoming year.


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5.1.18 Change in market dynamics/ Threat of new entrants

PABC is currently the sole manufacturer of aluminium beverage cans in Pakistan with no direct competition in the

industry. Any company setting up an aluminium beverage can packaging plant either in Pakistan or Afghanistan might

adversely affect the market share of PABC

The setting up aluminium beverage cans plant require high level of technical expertise and understanding of business.

Ashmore has experience of setting up and/or running aluminium beverage cans manufacturing plant in 3 countries

including 2 plants in Nigeria and 1 plant in Myanmar. Due to the management’s technical expertise and past

experience, PABC has been able to turn the Company profitable by reducing spoilage and bringing efficiency in

production process within 3rd full year of its operations. Ashmore has also capitalized their relationship with key

beverage bottlers (Pepsi Co. and Coca Cola) by meeting the quality standards and securing their contracts.

5.1.19 Environmental Risks

Adverse weather, climate changes or natural disasters (such as floods and earth quakes) may result in lower sales

and increase costs.

5.1.20 Pending Legal Proceedings:

The outcome of the case disclosed in Section 8 Legal Proceedings and Overdue Loans may result in a loss of PKR 171

Million. The Company’s legal counsel is confident that the case will be decided in favor of the Company.

5.1.21 Under-subscription Risk

The Offer of Pakistan Aluminium Beverage Cans Limited may be under-subscribed due to lack of interest on the part

of the investors. The book building process shall be considered as cancelled if

- The Company does not receive bids for the number of shares allocated under the Book Building portion;

- The Company does not receive at least 40 bids.

The bid money submitted by investors shall be refunded subsequently.

5.1.22 Capital Market Risk

After being listed on the Securities exchange, the price of Company’s shares will be determined by market forces

driven by socio – economic events – locally & internationally, capital & money market behavior, competitive

scenarios and Company performance. The value of share will be subjected to fluctuation based on combined impact

of market forces identified above.

NOTE: IT IS STATED THAT ALL KNOWN MATERIAL RISK FACTORS HAVE BEEN DISCLOSED AND THAT NOTHING

HAS BEEN CONCEALED IN THIS RESPECT.


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CERTIFICATE BY CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER OF THE COMPANY

April, 2021

The Chief Executive

Pakistan Stock Exchange Limited

Stock Exchange Building

Stock Exchange Road

Karachi

We being the Chief Executive Officer and Chief Financial Officer of the Company accept absolute responsibility for the disclosures made in this Offer for Sale Document. We hereby certify that we have reviewed this Offer for Sale Document and that it contains all the necessary information with regard to the Offer and constitutes full, true and plain disclosures of all material facts relating to the Company, the Offeror, and the Offer being made through this Offer for Sale Document and that nothing has been concealed.

The information contained in this Offer for Sale Document is true and correct to the best of our knowledge and the opinions and intendeds expressed herein are honestly held.

There are no other facts, the omission of which makes this Prospectus as a whole or any part thereof misleading.

For and behalf of Pakistan Aluminium Beverage Cans Limited




Page 54 of 138

UNDERTAKING BY THE COMPANY AND ITS SPONSORS


Page 55 of 138

STATEMENT BY THE COMPANY

March 25th, 2021

The Chief Executive Pakistan Stock Exchange Limited Stock Exchange Building Stock Exchange Road Karachi On behalf of Pakistan Aluminium Beverage Cans Limited (“PABC” or the “Company”), we hereby confirm that all material information as required under the Companies Act, 2017, the Securities Act, 2015, the Public Offering Regulations, 2017 and the Listing of Companies and Securities Regulations of the Pakistan Stock Exchange Limited has been disclosed in the Offer For Sale Document and that whatever is stated in Offer For Sale Document and the supporting documents is true and correct to the best of our knowledge and belief and that nothing has been concealed.

For and behalf of Pakistan Aluminium Beverage Cans Limited




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STATEMENT BY THE OFFEROR

March 25th, 2021

The Chief Executive Pakistan Stock Exchange Limited Stock Exchange Building Stock Exchange Road Karachi

As the Offeror, we hereby confirm that all material information as required under the Companies Act, 2017, the

Securities Act, 2015, the Public Offering Regulations, 2017 and the Listing of Companies and Securities Regulations

of the Pakistan Stock Exchange Limited has been disclosed in this Offer For Sale Document and that whatever is

stated in this Offer For Sale Document and the supporting documents is true and correct to the best of our

knowledge and belief and that nothing has been concealed.

-Sd- ___________________________ Soraj Bissoonauth

For or on behalf of Ashmore Mauritius PABC Limited


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STATEMENT BY LEAD MANAGER/CONSULTANT TO THE ISSUE


Page 58 of 138

STATEMENT BY BOOK RUNNER

March 25th, 2021

The Chief Executive Pakistan Stock Exchange Limited Stock Exchange Building Stock Exchange Road Karachi

Being mandated as the Book Runner to this Initial Public Offering of Pakistan Aluminium Beverage Cans Limited through the Book Building process, we hereby confirm that all material information as required under the Securities Act, 2015, the Listing of Companies and Securities Regulations of the Pakistan Stock Exchange Limited and the Public Offering Regulations, 2017 has been disclosed in this Offer For Sale Document and that whatever is stated in Offer For Sale Document and in the supporting documents is true and correct to the best of our knowledge and belief and that nothing has been concealed.

For and behalf of Arif Habib Limited

-sd- __________________ Syed Saquib Ali Director, Investment Banking


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6 FINANCIAL INFORMATION

AUDITORS REPORT UNDER CLAUSE 1 OF SECTION 2 OF THE FIRST SCHEDULE TO THE PUBLIC OFFERING

REGULATIONS, 2017 FOR THE PURPOSE OF INCLUSION IN THE OFFER FOR SALE DOCUMENT OF

PAKISTAN ALUMINIUM BEVERAGE CAN LIMITED

*


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-


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AUDITOR CERTIFICATE ON ISSUED, SUBSCRIBED, AND PAID-UP-CAPITAL OF THE COMPANY


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SHARE BREAK-UP VALUE CERTIFICATE


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SUMMARY OF FINANCIAL HIGHLIGHTS OPERF PAKISTAN ALUMINIUM BEVERAGE CANS LIMITED

PKR Million unless stated otherwise Audited Audited Audited Reviewed

CY18 CY19 CY20 4MCY2121

Income Statement

Sales 2,057 4,809 5,084 2,579

Cost of Sales (2,276) (3,735) (3,542) (1,696)

Gross Profit (219) 1,074 1,542 883

Admin Expense (240) (171) (159) (60)

Selling Expense (51) (99) (87) (33)

Impairment Loss - - (24) (3)

Other operating income 6 60 17 4

Other operating expense - (20) (168) (67)

Operating Profit (504) 843 1,121 723

Finance Cost (475) (578) (423) (86)

Profit Before Tax (979) 265 698 637

Taxation 181 (118) (87) (40)

Profit After Tax (799) 147 611 596

Depreciation 226 237 240 76

Amortization 6 7 7 0.0

EBITDA (272) 1,087 1,368 799

Balance Sheet

Non-Current Assets 6,508 6,333 6,092 6,022

Current Assets 1,539 2,612 2,713 3,427

Total Assets 8,047 8,945 8,805 9,449

Equity 1,718 2,533 3,144 3,740

Long-Term Debt 2,795 2,855 2,742

Liabilities against assets subject to finance lease - 31 - -

Long Term Deposits 5 1 1 1

Current Portion of non-current liabilities 3,582 505 459 559

Short-Term Borrowings 2,074 2,139 1,241 381

Non-Current Liabilities 389 3,291 3,363 3,265

Current Liabilities 5,940 3,121 2,298 2,444

Stock-in-trade 738 1,189 1,594 1,803

Trade debts 277 415 442 960

Trade and other payables 212 404 561 1,441

Cash Flow Statement

Cash Flow from Operating Activities (1,560) (76) 705 806

Cash Flow from Investing Activities (38) (18) (39) (7)

Cash Flow from Financing Activities 255 367 14 (15)

21 Unaudited Reviewed Accounts


Page 75 of 138

PKR Million unless stated otherwise Audited Audited Audited Reviewed

CY18 CY19 CY20 4MCY2121

Net increase in cash and cash equivalents (1,343) 273 681 784

Net Cash Balance (2,011) (1,738) (1,055) (268)

Capex 36 83 39 7

Growth

Sales Growth (%) - 133.8 5.7 -

EBITDA Growth (%) - 499.6 25.9 -

Profit after tax Growth (%) - 118.5 314.1 -

Margins

Gross Margin (%) (10.7) 22.3 30.3 34

Operating Margin (%) (24.5) 17.5 22.1 28

EBITDA Margin (%) (13.2) 22.6 26.9 31

Profit Before Tax Margin (%) (47.6) 5.5 13.7 25

Profit after tax Margin (%) (38.8) 3.1 12.0 23

Profitability Ratios

Earnings per share22 (PKR) (2.71) 0.45 1.69 1.65

Break-up value per share (PKR) 5.84 7.02 8.71 10.36

Return on equity 23(%) (46.5) 6.9 21.5 16.00%

Return on assets (%) (9.9) 1.6 6.9 6.34%

Outstanding shares (Million) 294.34 361.11 361.11 361.11

Balance Sheet Ratios

Fixed Asset Turnover 0.32 x 0.76 x 0.83 x 0.43 x

Asset Turnover 0.26x 0.54x 0.58 x 0.28 x

Current Ratio 0.26x 0.84x 1.18 x 1.40 x

Capex to total Assets (%) 0.44 0.92 0.44 0.08%

Receivable Turnover (days) 49 26 31 45

Inventory Turnover (days) 118 94 143 130

Payable Turnover (days) 34 30 58 104

Cash Conversion Cycle (Days) 133 90 116 71

Leverage Ratios

Debt to Equity 3.29x 2.16x 1.45x 1.53 x

Debt to Total Capital 70% 61% 52% 0.60 x

EBITDA/Interest -0.57 x 1.88 x 3.23 x 9.28 x

Debt / EBITDA 20.79 x 5.03 x 3.33 x 7.14 x

(EBITDA-CAPEX) (in Millions) (308) 1,004 1,329 792

(EBITDA-CAPEX)/Interest (0.65) x 1.74 x 3.14 x 9.20 x

Debt Service Coverage Ratio24 (1.06) x 1.46 x 2.65 x 8.39 x

22 Calculated on the basis of weighted average number of shares 23 Calculated on the basis of average equity for the year 24 DSCR is calculated by dividing operating income by Financial charges for the year


Page 76 of 138

COMMENTARY ON SELECT RATIOS

6.5.1 Gross & Operating Profit Margin:

The gross profit margin of the Company clocked in at 30.3% in CY20 as compared to 22.3% during CY19 on the back

of rising sales which grew by 5.7% in CY20 as against CY19 despite Covid induced lockdowns and border closures.

Another factor which contributed is decline in raw material (aluminium) cost as shown in the chart given below:

The gross margins further grew in 4MCY21 to 34%, on the back of production efficiencies and economies of scale.

The Company has also been able to bring down spoilage cost increasing production efficiency translating into better

gross margins.

6.5.2. Net Profit Margin:

Despite Covid related lockdowns, the net profit margin of the Company stood at 12% in CY 20 as compared to 3%

during CY19. This increase was witnessed majorly due to increase in operating profit of the Company and decline of

markup cost by 26.7% during CY20. The decline in markup cost was on the back of Company shifting their short term

facilities from Running Finance (approx. @ 7.5%) to ERF (approx. 3.5%) and decreasing short term borrowing by 42%

YoY.

6.5.3. Current Ratio:

The current ratio of the Company is 1.18x for the year CY20 as compared to 0.83x for CY19 showing the Company’s

ability to pay its short term liabilities from its current assets. This improvement is witnessed due to the Company

decreasing its short term borrowings by 42% in CY20.

6.5.4. Turnover Ratios:

The inventory days of the Company increased to 143 days in CY20 as against 94 days in CY19. This is due to the

Company increasing its inventory to take advantage of lower aluminium prices, resulting in cost saving which is also

in line with the sales volume for the year and upcoming sales orders.

The Company has been able to maintain its receivable days to 32 days during CY20 (CY19: 31 days), while the payable

days clocked in at 58 days (CY19: 30 days). Due to increase in inventory which was bought on credit, the payable

days were also increased.

6.5.5. Leverage Ratios:

The total interest bearing debt to equity also improved to 1.45x during CY20 when compared with 2.16x during CY19.


Page 77 of 138

The Company was able to decrease reliance on banks’ borrowings which was instrumental in improving the leverage

ratios.

6.5.6. Debt Service Coverage Ratios:

The debt service coverage ratio of the Company stands at 2.65x as of CY 2020 and has improved from 1.46x in CY 19

due to:

1) Increase in EBITDA of the Company due to increase in gross profit.

2) Reduction in interest expense because of reduction in short term borrowings and markup cost of the Company.

6.6. SUMMARY OF REVENUE AND EXPENDITURE OF PAKISTAN ALUMINIUM BEVERAGE CANS LIMITED

6.1.1 Revenue


Local Sales 1,477 65.0% 3,216 60.3% 3,681 64.8% 1,822 63.8%

Export Sales 795 35.0% 2,114 39.7% 1,998 35.2% 1,034 36.2%

Gross Sales 2,272 5,330 5,679 2,857

6.1.2 Expenditure


Cost of Sales 2,276 88.7% 3,735 92.8% 3,542 89.5% 1,696 91.5%

Selling and distribution expenses 51 2.0% 99 2.5% 87 2.2% 60 3.2%

Administrative expenses 240 9.3% 171 4.2% 159 4.0% 33 1.8%

Other operating expenses - - 20 0.5% 168 4.2% 65 3.5%

TOTAL 2,566 100% 4,025 100% 3,956 100% 1,854 100%

The cost of sales is mainly dependent upon procurement of raw material:


Raw material consumed 1,530 67% 2,951 79% 2,895 82% 1,252 80%

Total 1,530 2,951 2,895 1,252

6.1.3 SUMMARY OF OTHER INCOME

In PKR Million CY18 CY19 CY20

Other Income 5.7 59 17

Other income as % of operating profit (1.1) 7.1 1.5

Other income as % of sales 0 0 0

6.1.4 Breakdown of Other Income


Exchange Gain 2 49 -

Profit on Bank Deposits 3 2 7

Scrap Sales 0 3 4

Gain on disposal of fixed assets - 5 -

Gain on Termination of lease - - 3

Government grant 7 3


Page 78 of 138

6.7. SUMMARY OF MATERIAL PURCHASES

Following is the list of few vendors that represent more than 50% of total purchases undertaken by the Company

during CY20.

6.8. SUMMARY OF MATERIAL SALES

Following is the list of few customers that represent more than 50% of total sales undertaken by the Company during

CY20.

6.9. COMPARATIVE FINANCIAL ANALYSIS WITH PEER GROUP COMPANIES

There is no direct competitor of PABC in the aluminium beverage cans industry. However, there are few indirect

competitors in the packaging sector. Comparative analysis of PABC with indirect competitors is given below:

Company

2Share Price

3LTM EPS

LTM P/E


Float %

Beverage Packaging

Ecopack Limited 32.63 1.62 20.1x 21.37 1.5x 8% 3% 80%

Gatron Industries 425.5 34.6 12.3x 146.17 2.9x 24% 11% 5%

Ghani Glass Limited 48.56 4.39 11.1x 21.77 2.2x 20% 9% 25%

Balochistan Glass Limited 14.18 -0.5 N/A 10.18 1.4x N/A N/A 25%

Tripack Films Limited 174 30.01 5.8x 354.17 0.5x 8% 9% 35%

Average 12.3x 1.7x 15% 8%

S. No Vendor Name % of total cost in CY20 Country

1 Novelis MEA Ltd 45% South Korea

2 Bao Feng 15% China

3 NAFCEL 8% KSA

S. No Customer Name % of revenue in CY20 Country

1 Pakistan Beverages Ltd 22% Pakistan

2 Afghanistan Beverages Industry Limited 21% Afghanistan

3 Coca Cola Beverages Pakistan Ltd 19% Pakistan

4 Sukkur Beverages Ltd 9% Pakistan

5 Zalal Mowafaq Industrial Co. Ltd 9% Afghanistan


Page 79 of 138

Company

2Share Price

3LTM EPS

LTM P/E


Float %


35.001 1.78 19.7x 10.36 3.3x 18% 7% 26%

Non- Beverage Packaging

Century Paper 106.22 13.5 7.9x 55.23 1.9x 24% 12% 35%

Cherat Packaging 203.96 0.7 291.4x 280.38 0.7x 0% 0% 60%

Merit Packaging 15.26 -8.59 N/A 2.72 5.6x N/A N/A 45%

Packages Limited 480 31.55 15.2x 485.96 1.0x 6% 5% 25%

Roshan Packages 27.16 1.06 25.6x 42.08 0.6x 3% 2% 31%

Siddiqsons Tinplate 15.92 0.95 16.8x 12.33 1.3x 8% 3% 25%

Average 71.4x 1.9x 8 % 4%

*N/A represents companies with negative earning

1. Floor price of the Offer

2. Share prices other than PABC on 21st May 2021

3. Last Twelve month earning

4. Book value as at 31st March 2021

5. ROE is calculated by dividing last twelve months profit after tax with total equity as at December 31, 2020

6. ROA is calculated by dividing last twelve months’ profit after tax with total assets as at December 31, 2020

6 (A). REVALUATION OF FIXED ASSETS

The Company’s property, plant and equipment are stated at cost less accumulated depreciation and accumulated

impairment losses, if any, except for land which is stated at cost.

The Company has not conducted revaluation of its fixed assets.

6 (B). DIVIDEND POLICY

The Company intends to follow a consistent profit distribution policy for its members, subject to profitability, availability of adequate cash flows, the Board’s recommendation and shareholders’ approval, where required.

The rights in respect of capital and dividends attached to each ordinary share are and will be the same. The Company in its general meeting may declare dividends but no dividend shall exceed the amount recommended by the Directors. Dividend, if declared in the general meeting, shall be paid according to the provisions of the Companies Act.

The Board of Directors may from time to time declare interim dividends as appear to it to be justified by the profits of the Company. No dividend shall be paid otherwise than out of the profits of the Company for the year or any other undistributed profits.

No unpaid dividend shall bear interest or mark-up against the Company. The dividends shall be paid within the period laid down in the Companies Act.

The company has not yet paid any dividend.


Page 80 of 138

Under Section 242 of the Companies Act, any dividend payable in cash by a listed company, shall only be paid through electronic mode directly into the bank account designated by the entitled shareholder.

Therefore, the applicants must fill-in the relevant part of the Shares Subscription Form under the heading, “Dividend Mandate”.

Details of dividends and/or bonus shares issued over the past five years is as follows:

Description CY 18 CY 19 CY 20

Dividends (PKR) - - -

Dividend (%) - - -

Bonus Shares - - -

Bonus (%) - - -

Covenants/Restriction on Payment of Dividends:

PABC availed the loan extension and restructuring package “Debt Relief Scheme” announced by State Bank of

Pakistan, as part of the steps taken to dampen the effects of Covid-19. As part of the agreement, PABC has a

restriction to issue any dividends during the tenor of the relief (deferral/restructuring tenor) i.e. Aug. 2021.

The Company has procured PKR 2.1 Billion from a syndicate of banks led by Faysal Bank Limited (Details are disclosed

in section 11.1.2. The Company cannot pay or declare any dividends, distribution of profit in respect of its share

capital or subordinated loans by its shareholders, if a Termination Event has occurred and/or is continuing.

6.1.5 Eligibility for Dividend

The Ordinary Shares issued shall rank pari-passu with the existing shares in all matters of the Company, including the right to such bonus or right issues, and dividend as may be declared by the Company subsequent to the date of issue of such shares.

DIVIDEND PAYOUT OF LISTED ASSOCIATED COMPANIES

The Company has no listed associate company over which it has control.


Page 81 of 138

7 BOARD AND MANAGEMENT OF THE COMPANY

BOARD OF DIRECTORS OF THE COMPANY 25

S. No

Name Designation Address CNIC/ Passport

Current Directorships

Past Directorships

Period of Directorship in PABC

1.

Simon Jennings

Non-Executive Director / Chairman

Milner Mount, Bradda West Toad, Port Erin, 1MG 6PN, Isle of Man, UK

760846574 (Passport)

PABC None

December 2014 to date

2. Muhammad Abdullah Yusuf

Non-Executive Director

H # 744, St. No. 83, Sector I-8/4, Islamabad

37405-0223921-7

PABC None

December 2014 to date

3. Alexandra Frances Autrey


61 Aldwych London WC2B 4AE, England

500764813 (Passport)

PABC None

October 2017 to date

4. Ejaz Ahmed Independent Director

House No.15,Sector V, Street No. 1/1, Phase 2,DHA Lahore 54792,Pakistan

35200-8876543-5

PABC Husein Sugar Mills Limited

March 2021 to date

5. Zain Ashraf Mukaty


House # 25, Street No.H, Khayaban-e -Muhafiz, Phase VI, DHA Karachi

42301-1051513-9

PABC

None

March, 2019 to date

Liberty Mills Limited

Oncogen Pharma (Pvt) Ltd

Feroze 1888 Mills Limited

6. Muhammad Jawaid Iqbal

Independent Director

House # 7/1 Zamzama 5, DHA Phase 5, Karachi

42301-2617835-5

PABC

March, 2021 to date

Providus Capital (Pvt) Ltd

Ghandhara Nissan Ltd

Aisha Steel Mills Ltd

Tata Textile Mills Ltd

Island Textile Mills Ltd

Salfi Textile Mills Ltd

Tata Best Foods Pvt Ltd

25 The composition of Board of Directors may change after consummation of the Offer for Sale and Private Placement transactions.


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7. Azam Sakrani

Executive Director / CEO

House No. F-22/1, Block B, Mohalla Clifton, Karachi

42301-0900943-3

PABC Emerald Energy Limited

March, 2019 to date

Liberty Power Tech Limited

WND Energy Limited

Liberty Wind Power 1 Ltd

Liberty Wind Power 2 Ltd

Liberty Solar Energy Limited

Mr. Simon Jennings, Mr. Abdullah Yusuf and Ms. Alexandra were brought on board by Ashmore because of their

respective expertise. Mr. Simon and Mr. Abdullah will continue to serve on the Board after consummation of this

Offer for Sale.

PROFILES OF DIRECTORS

7.1.1 Simon Jennings – Chairman (Non-Executive Director)

Mr. Simon Jennings presently chairs the Board of PABC and also serves as the Strategic Advisor for the Company. He

has over 35 years of experience in the global packaging industry. Mr. Jennings has previously held key positions at

Rexam PLC and its subsidiaries. He has also set up Nomis Consultancy Limited and supports the Board and owners

of a number of businesses, particularly in the packaging industry.

Mr. Jennings has been a key member in ensuring that world class industry standards are developed in the plant set-

up from equipment, raw material sourcing, and production to the quality and commercialization of the end product.

7.1.2 Abdullah Yousuf – Co Chairman (Non-Executive Director)

Mr. Abdullah Yousuf has over 50 years of experience, particularly in Pakistan’s public sector, holding various key

positions including Secretary of the Privatization Commission, the Board of Investment and the Ministry of

Petroleum & Natural Resources. Mr. Yousuf is also Ex-Chairman of Federal Board of Revenue.

7.1.3 Alexandra Autrey – (Non-Executive Director)

Ms. Alexandra Autrey is the Group Head for Legal at Ashmore since 2005. Ms. Autrey has an LLM from the University

of London and a LLB (Hons) and BA (Hons) from Australian National University. She has previously served as senior

counsel for Westpac Banking Corporation’s Institutional Bank and Westpac Institutional Bank’s Group Treasury and

Institutional Banking departments. As Director for PABC, Ms. Autrey oversees compliance to legal standards in line

with Ashmore’s policies and provides guidance in all legal matters related to the business.

7.1.4 Zain Ashraf Mukaty – (Non-Executive Director)

Mr. Zain Mukaty serves on the Board of Pakistan Aluminium Beverage Cans Limited. Mr. Mukaty is also associated

with the Liberty Group since 2013. Mr. Mukaty holds a degree from the University of Pennsylvania in Finance,

Management and Systems Engineering. He has over 8 years of experience to his name.

7.1.5 Azam Sakrani – (Chief Executive Officer- Executive Director)

Mr. Azam Sakrani is serving on the Board and is the Chief Executive Office for PABC. He carries over 25 years of

diverse corporate management experience. Mr. Sakrani holds a Bachelors and an MBA in Finance from the USA. His

prior experiences include Chief Executive Officer Liberty Power Tech Limited, Head of Islamic Banking Habib Bank

AG Zurich plc, UK and Chief Executive Officer Al-Noor Modaraba.


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7.1.6 Muhammad Jawaid Iqbal – (Independent Director)

Mr. Jawaid Iqbal was a senior corporate banker and worked at major banks in Pakistan for about two decades before

retiring from banking and starting his own business. Currently he is the Chief Executive Officer of Providus Capital

(Pvt.) Ltd, which makes investments in Pakistan’s public and private markets. He has served on boards of many

companies including Hub Power, Lucky Cement, Fatima Fertilizer, Atlas Power, Allied Asset Management and Cyan

Limited. He has also served as the President of the CFA Society of Pakistan from 2009 to 2013. Jawaid is a CFA charter

holder and has a Master’s degree in Business Administration. He completed the Associate Management Program of

Harvard Business School in 2013.

7.1.7 Ejaz Ahmed – (Independent Director)

Mr. Ejaz Ahmad is a senior finance professional with over 40 years of experience. Ejaz retired in 2011 from Juffali

Group (KSA) after serving the diversified family group in various senior finance positions for over 18 years with a

view to helping the Group achieve its strategic objectives. During his tenure with the Juffali Group, he worked within

the Group’s trading, real estate, industrial, and Head Office divisions. His experience includes delivering accounting

& finance function transformation and ERP implementation. In addition, he has served with diversified businesses

in Africa and Pakistan, having experience of various industries including Textile, Logistics and Manufacturing. Ejaz

started his career with Riaz Ahmad & Company, Chartered Accountants, Karachi, Pakistan and qualified in 1970

auditing clients in the Aviation, Consumer, Manufacturing and Textiles industries.

PROFILE OF SENIOR MANAGEMENT

7.1.8 Azam Sakrani– (Chief Executive Officer)

Mr. Azam Sakrani is the Chief Executive Office for PABC and carries over 25 years of diverse corporate management experience. Mr. Sakrani holds a Bachelors and an MBA in Finance from the USA. His prior experiences include Chief Executive Officer Liberty Power Tech Limited, Head of Islamic Banking Habib Bank AG Zurich plc, UK and Chief Executive Officer Al-Noor Modaraba.

7.1.9 Adnan Shaikh (Chief Financial Officer & Company Secretary)

Mr. Adnan Shaikh is a Chartered Accountant and Cost and Management Accountant by profession with over 20 years of experience to his name. His previous experiences include Group CFO Brainchild Communications, CFO GroupM Pakistan, General Manager Finance at Herbion Pakistan and Chief Accountant & Company Secretary Singer Pakistan.

7.1.10 Hamed Mir Mohammadi (General Manager Plant)

Mr. Hamed Mir Mohammadi is a pioneer in his field with Bachelors of Science in Mechanical Applied Design and

over 15 years of experience. He has previously served as Assistant Plant Manager, Production Manager & Shift

Manager, Aujan Industries, and Designer at Tahghighat Sanat Company, JTS Company efficiency, steam and power

efficiency.

1.2. QUALIFICATION OF DIRECTORS

No person shall be appointed as a Director of the Company who is ineligible to be appointed as Director on any one or more of the grounds enumerated in Section 153 of the Companies Act or any other law for the time being in force.

1.3. APPOINTMENT AND ELECTION OF DIRECTORS AND CHIEF EXECUTIVE

The Directors of the Company are elected for a term of three years in accordance with the procedure laid down in section 159 of the Companies Act and Article 87.

The current Board of Directors were appointed on May 22, 2019.


Page 84 of 138

1.4. INTEREST OF DIRECTORS

The Directors may have deemed to be interested to the extent of fees payable to them for attending the Board meetings. The Directors performing whole time services in the Company may also be deemed interested in the remuneration payable to them by the Company. The Nominee Directors have interest in the Company to the extent of representing the Sponsors in the capital of the Company.

Following Directors are holding Ordinary Shares of the Company:

Name of Shareholder Designation Numbers of Shares held Value of Shares held

Zain Ashraf Mukaty Non-Executive Director 613 6,130

Azam Sakrani Executive Director 613 6,130

Muhammad Jawaid Iqbal Independent Director 500 5,000

Muhammad Abdullah Yusuf Non-Executive Director 500 5,000

Simon Michael Gwyn Jennings Non-Executive Director 500 5,000

Alexandra Frances Autrey Non-Executive Director 500 5,000

Ejaz Ahmed Independent Director 500 5,000

1.5. REMUNERATION OF THE DIRECTORS

As per Article 72 of Articles of Association, the remuneration of a Director other than regular paid Chief Executive, full time working Director shall be such sum as may be fixed by the Directors.

As per Article 73, the Directors may allow and pay to any Director for the purpose of attending meeting such sum as the Directors may consider fair compensation for travelling and other expenses in addition to his fee for attending such meeting as above specified and the Directors may from time to time fix the remuneration to be paid to any member or members of the body constituting a committee appointed by the Directors in terms of these Articles and may pay the same.

If any Director being willing shall be called upon to perform extra services or to make any special exertion for any of the purpose of the Company, the Company shall remunerate such Director by a fixed sum as may be determined by the Directors and such remuneration may be either in addition to or in substitution for his remuneration provided above.

Director’s rumuneration for the last three years is given below


Director’s fee 15.514 16.006 21.750

The breakup is given below:

Name Designation CY18 CY19 CY20

Simon Jennings Chairman 8.726 9.003 12.234

Abdullah Yusuf Director 6.787 7.002 9.516

1.6. BENEFITS TO PROMOTERS AND OFFICERS

No benefit has been given or is intended to be given by the Company to the promoters and officers of the Company other than remuneration for services rendered by them as full time executives of the Company.


Page 85 of 138

1.7. VOTING RIGHTS

According to Article 58, on a show of hands every member present in person shall have one vote so that no person present shall be entitled to cast more than one vote on a show of hands. On a poll every member present in person or by proxy shall have one vote for every share held by him.

As per Article 59, A member of unsound mind, or in respect of whom and order has been made by any court having jurisdiction in lunacy may vote, whether on a show of hands or on a poll, by his committee, receiver, or other legal guardian and any such committee or legal guardian may, on a poll, vote by proxy.

As per Article 60, no person shall be appointed an agent under a Power of Attorney or a proxy who is not a member of the Company or qualified to vote save that a corporation or a company being a member of the Company appoint as the agent or proxy or representative one of the officers or any other person though not a member of the Company.

The instruments appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a certified true copy of that power or authority shall be deposited at the office and not less than forty-eight hours before due time of meeting or poll, and in default the instrument of proxy shall to be treated as valid, as per Article 61.

According to Article 62, subject to the provision of section 161 (4) of The Companies Act, 2017, an instrument of proxy shall be common usual form or such form as the Directors may prescribe from time to time.

1.8. AUDIT COMMITTEE

The Board of Directors has set up an effective internal audit function managed by suitable qualified and experienced personnel who are conversant with the policies and procedures of the Company and are involved in the internal audit function on a full time basis.

The Audit Committee comprises of the following members:

1. Ejaz Ahmed (Chairman)

2. Muhammad Abdullah Yusuf


7.9. HUMAN RESOURCE AND REMUNERATION COMMITTEE

The Board of Directors has set up an effective Human Resources function managed by suitable and qualified personnel who are conversant with the policies & procedures of the Company and are involved in Human Resources function on a full time basis.

The Human Resource and Remuneration Committee comprises of the following members:

1. Muhammad Jawaid Iqbal (Chairman)

2. Simon Michael Gwyn Jennings


7.10. BORROWING POWERS OF DIRECTORS

As per Article 37, the Directors may from time to time exercise all the powers of the Company to obtain finance or

otherwise raise or borrow money/term capital, participatory redeemable capital or in any other legal form from

banks, financial institutions or from any other institution and secure the payment of any such sum or sums of money

and to mortgage or charge its undertaking, property and to issue participation, term certificates, term finance

certificates, modaraba certificates, musharika certificates, debentures, debenture stock and any other securities in

all legal manners whether outright or as security for any debt, liability and obligation of the Company or for any third

party.


Page 86 of 138

7.11. POWERS OF DIRECTORS

The control of the Company shall be vested in the Board of Directors and the business of the Company shall be

managed by the Board of Directors who may exercise all such powers of the Company and do all such acts and things

as may be exercised or done by the Company as by the Companies Act or by Articles of the Company or by a special

resolution expressly directed or required to be exercised or done by the Company.

7.12. INDEMNITY AVAILABLE TO DIRECTORS AND OTHER EMPLOYEES OF THE COMPANY

As per article 127, subject to provision of section 194 of the Companies Ordinance (now The Companies Act, 2017),

every Director, auditor and other officer or servant of the Company shall be indemnified by the Company against

and it shall be the duty of the Directors to pay out the funds of the Company – all costs, losses and expenses, which

any such officer or servant may incur or become liable to by reasons of any contract entered into or act or thing

done by him as such officer or servant or in any way in the discharge of his duties including travelling expenses and

in particular, as not to limit the generality of the foregoing provisions, against all liabilities incurred by him as such

Director, manager officer or servant in defending any proceedings whether civil or criminal, in which judgements is

given in his favor or he is acquitted or in connection with which relief is granted by the Court and the amount for

which such indemnity is provided shall immediately attach as a lieu on the property of Company and have priority

as between the members over all other claims.

7.13. CORPORATE GOVERNANCE

The Company is compliant with the requirements of The Code of Corporate Governance with regards to composition of Board of Directors and Board Committees.

The Company shall comply with all the rules and regulations applicable to the Company with regards to the Listed Companies (Code of Corporate Governance) Regulation, 2019. Furthermore, the Company will also ensure that:

1. by June 30th, 2021, at least half of the directors on its board;

2. by June 30th, 2022 at least 75% of the directors on its board; and

3. by June 30th, 2022 all the directors on its board

have acquired the prescribed certification under any director training program offered by institutions, local or foreign, that meet the criteria specified by the Commission and approved by it.

The Company shall also encourage representation of minority shareholders on the Board of Directors.


Page 87 of 138

8 LEGAL PROCEEDINGS AND OVERDUE LOANS

LEGAL PROCEEDINGS

Order dated

Issuing Authority

Matter

Tax Period

Order Amount/ Financial

Impact (PKR Mn)

Current status

Management's Stance

Provision in Financial Statements

12.09.2019 Punjab Revenue Authority

Non-deduction of sales tax as recipient of services

01 July 2016 to 30 June 2017

170.9 The hearing was fixed for 25th March 2021 but it was adjourned to a date which will be announced later

The management is confident that they have good arguable case and the issue will be finally decided in the favor of the Company.

Company has not recorded any provision in financial statements. Please see Note on Contingencies in the Financial Statements for details.

During 2016-2017, PABC paid an amount of approximately Rs.1.1 billion to Descon Engineering Limited (Descon) as authorized contractor and Fabricator for the project. Invoices from Descon were received without any sales tax (PRA) @16%, which was equivalent to approximately Rs.170.9 million based on the ground that Descon has obtained stay order from Lahore High Court for non-applicability of PRA Sales Tax on its services. On the basis of stay order obtained by Descon, PABC also filed petition in Lahore High Court (LHC) and obtained stay accordingly. Concerned tax officer of PRA during audit for the above year verified the case and issued notice to PABC of a potential sales tax liability of approximately Rs.170.9 million as the stay order granted to Descon by Lahore High Court was vacated on July 19, 2019. PABC received an assessment order issued by Commissioner PRA for an amount of Rs. 170.9 million dated 12-09-2019 received by PABC on 18-09-2019. PABC’s Board of Directors on July 26, 2019 approved to file an Intra Court Appeal (ICA) in 20 days ending on August 08, 2019 with LHC. After submission of ICA with LHC, PABC’s lawyer appeared before the Deputy Commissioner PRA and updated him about submission of ICA, however, Commissioner insisted that the status of appeal filed is not updated on the website of Lahore High Court. Commissioner PRA again issued Assessment Order against which PABC filed an appeal with Appellate Tribunal PRA Lahore on October 12, 2019. The management is confident that they have a good arguable case and the issue will be finally decided in the favor of the Company.

There are no significant outstanding legal or taxation proceedings other than the normal course of business involving

the Company, its Sponsors, substantial shareholders and directors, which could have a material impact on the

Company.

OVERDUE LOANS

There are no overdue loans (local or foreign currency) on the Company, its Sponsor promoters, substantial shareholders, Directors and Associated companies The Company, its CEO, its Directors and its Sponsors, under the oath, undertakes that they have no overdue payment to any financial institutions.


Page 88 of 138

9 UNDERWRITING ARRANGEMENT, COMMISSION, BROKERAGE AND OTHER EXPENSES

9.1. UNDERWRITING

Book Building Portion

Arif Habib Limited has been appointed as the Book Runner to the Offer. The Book Runner will credit underwrite 93,888,000 shares being offered for subscription through the Book Building representing 100% of the Offer as required under regulation 7(6) of the PO Regulations, with the limitations in effect that the Book Runner shall only underwrite the default portion of the Book Building, if any, at the Strike Price determined through the Book Building process.

General Public Portion

The General Public Portion of the Offer has not been underwritten in terms of Regulation 7(4) of the Regulations.

BUY BACK / REPURCHASE AGREEMENT

THE BOOK RUNNER IN THE CAPACITY AS UNDERWRITER OF THE BOOK BUILDING PORTION HAS NOT ENTERED INTO ANY BUY BACK / RE-PURCHASE AGREEMENT WITH THE COMPANY, THE OFFEROR OR ANY OTHER PERSON IN RESPECT OF THIS OF SHARES.

ALSO, NEITHER THE COMPANY NOR THE OFFEROR OR ANY OF ITS ASSOCIATES HAVE ENTERED INTO ANY BUY BACK / RE-PURCHASE AGREEMENT WITH THE BOOK RUNNERS IN THE CAPACITY AS UNDERWRITER OR ITS ASSOCIATES. THE COMPANY, OFFEROR AND ITS ASSOCIATES SHALL NOT BUY BACK / RE-PURCHASE SHARES FROM THE BOOK RUNNERS AND ITS ASSOCIATES TAKEN UP, IF ANY, BY IT IN CAPACITY AS THE BOOK RUNNER.

9.2. COMMISSION OF THE BANKERS TO THE ISSUE

Commission at the rate of 0.25% (inclusive of all taxes) of the amount collected on allotment in respect of successful applicants will be paid by the Company to the Bankers to the Issue for services to be rendered by them in connection with the Retail Portion of the Offer.

9.3. FEES AND EXPENSES FOR E-IPO SYSTEMS

Commission on application received through the e-IPO systems of PSX and CDC will be paid to PSX and CDC which

shall be 0.8% of the amount of the successful applications. PSX and CDC will share the fee with other participants of

the e-IPO system at a ratio agreed amongst them.

9.4. BROKERAGE

For this Offer, brokerage shall be paid to the TRE Certificate Holders of PSX at the rate of 1.00% of the value of shares (including premium, if any) on successful applications for Book Building and General Public Portion.

9.5. ESTIMATED EXPENSES OF THE OFFER

Expenses to the Offer are estimated not to exceed PKR 126,220,059/-. The break-up of these preliminary expenses is given below:

Particulars1 Rate Expense (PKR) @ Floor

Advisory and Arrangement Fee (Lead Manager and Bookrunner fee)2 2.40% 78,865,920

Commission to Bankers for General Public 0.25% 1,232,280

PSX and CDC e-IPO Facility Charges 0.80% 2,628,864

e-IPO Banks charges 300,000

Bankers to the Issue - Out of Pocket Expenses 350,000

Broker's/TREC Holders Commission 1.00% 32,860,800


Page 89 of 138

PSX Initial Listing Fees (maximum) 1,500,000

PSX Services Fee 50,000

PSX Book Building Software Charges 500,000

Share Registrar, Transfer Agent and Balloting Agent 150,000

Marketing & Printing Expenses 6,000,000

CDC – Transfer Fee 0.004% 131,443

CDC - Annual Fee 800,000

SECP IPO Application Processing Fee 200,000

SECP Supervisory Fee 150,000

Miscellaneous expenses 500,000

Total 126,219,307

__________________________

1Please note that fee mentioned in percentages above are calculated on the basis of Floor Price. The actual fee will be finalized once the Strike Price is determined in the Book Building process 2Advisory and Arrangement Fee of 2.4% being the maximum slab


Page 90 of 138

10 MISCELLANEOUS INFORMATION

REGISTERED OFFICE/ CORPORATE OFFICE

Pakistan Aluminium Beverage Cans Limited Plot # 29, 30, Sahiawala, M-3 Industrial City, Faisalabad, Pakistan. Website: http://pkbevcan.com/ E-mail: [email protected] Contact Person: Muhammad Shehroze Designation: Deputy Manager Finance Contact No: (+92)-41-8731364

BANKERS AND FINANCIAL INSTITUTIONS TO THE COMPANY

S.No Name Address Contact no. Email

1 Allied Bank

Limited

Corporate Branch, 7-E/III,

Main Boulevard, Lahore

0342-

8885555 [email protected]

2 Askari Bank Park Lane Tower Branch,

Lahore

0345-


3 Bank AL-Habib

Limited

Islamic Banking Branch, Main

Market Gulberg, Lahore

0332-


4 Bank Islami

Pakistan Limited

Head Office 15th Floor

Executive Tower, Dolmen

City Clifton Block 4 Karachi

0322-


5 Bank of Khyber Corporate Branch, Clifton,

Karachi

021-


6 Faysal Bank

Limited 310- Upper Mall Lahore

0340-


7 Habib Bank

Limited

Corporate Habib Bank

Tower, Blue Area, Islamabad

+92 51

7080700 ext


8 Habib

Metropolitan Bank

Sargodha Road Branch,

Faisalabad Pakistan

0321-

4395331

[email protected]

m

9 MCB Bank Limited

1501-Sector I/8 Markaz

Branch, Laraib Centre,

Islamabad

+92 51 2288746

[email protected]

10 Meezan Bank

Limited

Civil Lines Branch,Bilal Road,

Faisalabad

0321-


11 National Bank of

Pakistan Corporate Branch, Kohinoor City, Faisalabad

+92 41 9220637

[email protected]




Page 91 of 138

AUDITORS OF THE COMPANY

Name: A.F Ferguson & Co., Chartered Accountants Address: 23-C, Aziz Avenue, Canal Bank, Gulberg V, Lahore Contact Person: Asad Aleem Khan Designation: Engagement Partner Tel: 042-35715868 Email: [email protected]

LEGAL ADVISOR OF THE COMPANY

Name: Muhammad Mahmood Arif Address: House no. 290 J-2, Muhalla Johar Town, Lahore Tel: 042-35875840 Email: [email protected]

COMPUTER BALLOTERS & SHARE REGISTRAR

Name: THK Associates (Pvt) Ltd Address: Plot No. 32-C, Jami Commercial Street 2, DHA Phase VII, Karachi Tel: 021-35890051 Email: [email protected]

LEAD MANAGER/CONSULTANT TO THE ISSUE & BOOK RUNNER

Arif Habib Limited Arif Habib Center 23, MT Khan Road, Karachi Tel: 021-38899223 Fax: 021-3243 3542 Email: [email protected] Website: www.arifhabibltd.com



http://www.arifhabibltd.com/


Page 92 of 138

11 MATERIAL CONTRACTS

11.1.1 Details of Short-Term Financing Facilities

Sr. No.

Bank Name Facility Limit PKR Mn Markup Date Sanctioned

Expiry Date

1. Faysal Bank Limited

Running Finance 570 3 Month KIBOR + 0.4%

Dec 2020 Jun 2021

ERF 1 (Sub limit) 570 SBP Rate* + 1%

ERF 2 (Sub limit) 462 SBP Rate + 1%

Istisna facility 400 3 Month KIBOR + 0.4%

(Sight/Usance) 400 0.10% per quarter

Bank Guarantee 70 0.10% per quarter

LC - Sight 400 0.10% per quarter

2. Allied Bank Limited

ERF - Part 1 (Sub limit)

250 SBP Rate + 0.75%

Dec 2020 Jun 2021

Sight LC 250 0.02% Per Qtr

FATR (sub limit) 250 3 Month KIBOR + 0.75%

LC-Sight Foreign Facility (Sub limit

250 As advised by Treasury***

LC Usance 250 0.03% Per Qtr

Running Finance 250 3 Month KIBOR + 0.50%

3. Askari Bank Limited

Running Finance 200

3 Month KIBOR + .40%

Nov 2019 Aug 2021

SBP- ERF -1 (sub. Limit)

200

SBP Rate +0.40%

Sight LC /Usance LC

200

0.10% Per Qtr

FATR (Sub. Limit)

200


Local Bill Discounting

90


Bank Guarantee 10 3 Month KIBOR + .25%

4. Bank Of Khyber Limited

Running Finance 390 3 Month KIBOR

+ .60%

Sep 2020 July 2021

ERF -1 (sub Limit)

390 SBP rate + 0.40%

Sight LC /Usance LC

390 0.10 % Per Qtr

FATR (Sub. Limit of 1)

390 3 Month KIBOR + .40%

Local Bill Discounting

300 3 Month KIBOR + .40% (0.05% up front)

Bank Guarantee 10 0.10% Per Qtr

LC (Sight) 100 0.10% Per Qtr

5. Sight LC / PAD 1,500 0.1% Per Qtr Oct 2020 Sep 2021


Page 93 of 138

Sr. No.

Bank Name Facility Limit PKR Mn Markup Date Sanctioned

Expiry Date

Habib Metropolitan Bank Ltd

FIM 600 3 Month KIBOR + 0.40%

DALC 1,500 0.1% Per Qtr

UPAD 1,500 0.1% Per Qtr

FE-25 Import / pre / post

1,500 6 Month Libor +2.035%

RF 500 3 Month KIBOR + 0.50% P.A.

FATR - 150 DAYS 500 3 Month KIBOR + 0.50% P.A.

ERF-Part 1/2 500 SBP + 0.75% P.A

6. Bank Islami Pakistan Limited

LC Sight 250 0.03% Per Qtr

Jun 2019 March 2021**

IERF - Part 1 - Istisna

250 SBP Rate +1%

IERF - Part 2 - Istisna

250 SBP Rate +1%

IERF - Part 1 - Murabaha

250 SBP Rate +1%

IERF - Part 2 - Murabaha

250 SBP Rate+1%

Murabaha 250 3 Month KIBOR +

1%

Istisna 250 3 Month KIBOR

+1%

Karobar Finance 250 3MK+1%

7. Bank Al Habib Limited

Istisna 250

3 Month KIBOR + 0.4%

Sep 2020 Jun 2021

IERF-II 250

SBP Rate + 0.70% SBP Rate + 0.70%

IERF-I 100

SBP Rate + 0.70%

Istisna - FE 25 250

3M Libor + 1.45%

LID 250

3 Month KIBOR + 0.4%

Usance LC 500

0.1% Per Qtr

Acceptance 500

0.1% Per Qtr

Sight LC - Foreign

500

0.1% Per Qtr

Istisna FIM - FE 25

300

3 Month LIBOR + 1.45%

*SBP Rate = 3%

**Limit of Bank Islami Pakistan Limited have expired, and the Company has already applied for renewal of limits.

*** As advised by Treasury is a rate quoted by bank’s treasury on a case to case basis.


Page 94 of 138

11.1.2 Details of Long-Term Financing Facilities

PABC has procured a Syndicated Term Finance Facility 26led by Faysal Bank Limited. The participation in the Syndicate

is as follows:

Sr. No. Bank Name Limit (PKR Mn) Markup Date Sanctioned Expiry Date

1. Faysal Bank Limited PKR 1,200 Mn

6 Month Kibor + 0.50%

June 2018 June 2027

2. Askari Bank Limited PKR 17 Mn

3. Bank of Khyber PKR 209 Mn

4. Allied Bank Limited PKR 174 Mn

5. Habib Metropolitan PKR 500 Mn

Total PKR 2,100 Mn

PABC has also availed Long Term Finance Facility from SBP, details of which are given below:


1. Faysal Bank Limited

PKR 1,100 Mn SBP Rate + 1%

Apr 2021 Apr 2031

2. Askari Bank Limited PKR 782 Mn SBP Rate + .50%

Jun 2018 July 2027 3. Bank of Khyber PKR 391 Mn

4. Allied Bank Limited PKR 326 Mn

5. Habib Metropolitan Bank PKR 70 Mn SBP Rate + 1%

Dec 2020 Sep 2023

Total PKR 2,669 Mn *SBP Rate = 3%

In addition to this, PABC has also availed Diminishing Musharakah facility from Faysal Bank Limited under SBP

Islamic Refinance Scheme for payment of wages & salaries to the workers & employees, details of which are as

under:


1. Faysal Bank Limited – Tranche 1

PKR 61.4 Mn SBP Rate* + 0.75%

Aug 2020 Dec 2022

2. Faysal Bank Limited – Tranche 2

PKR 61.1 Mn

Total PKR 122.5 Mn *SBP Rate = 0%

11.1.3. INSPECTION OF DOCUMENTS AND CONTRACTS

Copies of the Memorandum and Articles of Association, the Audited Financial Statements, the Auditor’s Certificates,

Information Memorandum and copies of the agreements referred to in this Offer for Sale Document may be

inspected during usual business hours on any working day at the registered office of the Company from the date of

publication of this Offer for Sale Document until the closing of the subscription list.

26 PABC availed the loan extension and restructuring package “Debt Relief Scheme” announced by State Bank of Pakistan, as part

of the steps taken to dampen the effects of Covid-19 for all short term and long term financing facilities except Running Finance of Askari Bank Limited.


Page 95 of 138

MEMORANDUM OF ASSOCIATION

The Memorandum of Association, inter alia, contains the objects for which the Company was incorporated and the business which the Company is authorized to undertake. A copy of the Memorandum of Association is annexed to this Offer for Sale Document and with every issue of the Offer for Sale Document except the one that is released in newspapers as advertisement.

FINANCIAL YEAR OF THE COMPANY

The financial year of the Company commences on Jan 1 and ends on Dec 31.


Page 96 of 138

12 BOOK BUILDING PROCEDURE/INSTRUCTIONS FOR REGISTRATION AND BIDDING

BOOK BUILDING PROCEDURE

12.1.1 Brief Structure

The Present Offer

The Offer comprises of 93,888,000 Ordinary Shares of face value worth PKR 10/- each i.e.; 26% of the existing paid up capital of PABC offered by the Ashmore Mauritius PABC Limited who is Sponsor of Pakistan Aluminium Beverage Cans Limited.

The entire Offer of 93,888,000 Ordinary Shares will be offered through the Book Building process at a Floor Price of PKR 35/- per share. Initially, 75% of the Offer size i.e. 70,416,000 Ordinary Shares will be allotted to successful Bidders and 25% of the Offer i.e. 23,742,000 Ordinary Shares will be offered to Retail Investors. Unsubscribed shares, if any, of the General Subscription portion will be allocated to successful Bidders of the Book Building Portion on a pro-rata basis.

The Floor Price of PKR 35/- has a maximum Price Band of 40%, above which no Bid shall be accepted. At maximum

Price Band, the highest Strike Price that can be Bid for shall be PKR 49/- per share.

The Bidders shall give an undertaking along with the application that they would subscribe to the unsubscribed shares, if any, by the retail investors and their remaining Bid Money would remain deposited/ blocked till allotment of unsubscribed shares, if any, of the retail portion to them on pro-rata basis. In case the retail portion is fully subscribed, the Bid Money shall be unblocked within one (1) working day or refunded within three (3) working days of the closing of the public subscription.

Within 3 working days of the closing of the Bidding Period, a Supplement to the Offer for Sale Document will be published in at least all those newspapers in which the Offer for Sale Document is published. The Supplement will contain information related to the Strike Price, the Offer Price, dates of the Public Subscription, and category wise break-up of the successful Bidders. Format of the Supplement is given on page 3 of this Offer for Sale Document.

12.1.2 Types of Bids and Procedure for making a Bid

Book Building is a process whereby investors Bid for a specific number of shares at various prices. The Company set a Floor Price, which is the minimum / lowest price a Bidder can Bid at. An order book of Bids is maintained by the Book Runner, which is then used to determine the Strike Price through the “Dutch Auction Method”.

Under the Dutch Auction Method, the Strike Price is determined by lowering the Bid Price to the extent that the total number of shares offered through the Book Building process are subscribed.

A Bid by a Bidder can be a “Limit Bid”, or a “Step Bid”, each of which are explained below:

Limit Bid: Limit Bid is at the Limit Price, which is the maximum price a Bidder is willing to pay for a specified number of shares.

In such a case, a Bidder explicitly states a price at which he / she / it is willing to subscribe to a specific number of shares. For instance, a Bidder may Bid for 1 Million shares at PKR 45.00 per share, based on which the total Application Money would amount to PKR 45 Million. In this case the Bid Amount will be also PKR 45 Million. Since the Bidder has placed a Limit Bid of PKR 45.00 per share, this indicates that he / she / it is willing to subscribe the shares at a price up to PKR 45.00 per share.

Step Bid: A series of Limit Bids at increasing prices. The amount of any individual step shall not be less than PKR

1,000,000.


Page 97 of 138

Under this bidding strategy, Bidders place a number of Limit Bids at different increasing price levels. A Bidder may, for instance, make a Bid for 0.7 Million shares at PKR 43.00 per share, 0.6 Million shares at PKR 44.00 per share and 0.5 Million shares at PKR 45.00 per share. Therefore, in essence the Bidder has placed one Step Bid comprising of three Limit Bids at increasing prices. The Bid amount will be PKR 79.0 Million. In case of individual Bidder, the Margin Money will be 100% i.e. PKR 79.0 Million whereas in case of Institutional Bidders the Margin Money shall be 25% of the Bid Amount i.e. PKR 19.75 Million.

RESTRICTIONS:

(i) AN ELIGIBLE INVESTOR SHALL NOT:

(a) MAKE BID BELOW THE FLOOR PRICE AND ABOVE THE UPPER LIMIT OF THE PRICE BAND; (b) MAKE BID FOR MORE THAN 10% OF THE SHARES ALLOCATED UNDER THE BOOK BUILDING

PORTION (c) MAKE A BID WITH A PRICE VARIATION OF MORE THAN 10% OF THE PREVAILING INDICATIVE

STRIKE PRICE AS PER REGULATION 10(2)(iii) OF THE PO REGULATIONS (d) PLACE CONSOLIDATED BID (e) MAKE MORE THAN ONE BID SEVERALLY OR JOINTLY (f) MAKE DOWNWARD REVISION BOTH IN TERMS OF BID PRICE AND BID VOLUME; PROVIDED THAT

INCASE OF UPWARD REVISION OF THE BID PRICE, THE NUMBER OF SHARES BID FOR I.E. BID VOLUME MAY BE ADJUSTED ENSURING THAT THE BID AMOUNT OR BID MONEY REMAINS THE SAME; AND

(g) WITHDRAW BID

(ii) RELATED EMPLOYEES OF THE COMPANY, OFFEROR, LEAD MANAGER AND THE BOOK RUNNER SHALL NOT PARTICIPATE IN THE BIDDING PROCESS.

(iii) NO PERSON SHALL TAKE PART IN THE BOOK BUILDING PROCESS, DIRECTLY OR INDIRECTLY SEVERALLY OR JOINTLY IN ANY MANNER OR ENGAGE IN ANY ACT OR PRACTICE WHICH CREATE A FALSE AND MISLEADING APPEARANCE OF ACTIVE BIDDING FOR RAISING OR DEPRESSING STRIKE PRICE IN THE BOOK BUILDING PROCESS.

(iv) AS PER REGULATION 7(8) OF THE PO REGULATION, THE ASSOCIATES OF THE COMPANY, OFFEROR AS DISCLOSED IN THE OFFER FOR SALE DOCUMENT SHALL NOT IN AGGREGATE MAKE BIDS IN EXCESS OF TEN (10) PER CENT OF THE SHARES OFFERED THROUGH BOOK BUILDING.

(v) AS PER REGULATION 7(9) OF THE PO REGULATIONS, THE ASSOCIATES OF THE LEAD MANAGER TO THE OFFER AND BOOK RUNNER SHALL NOT IN AGGREGATE MAKE BIDS IN EXCESS OF TEN (10) PERCENT OF THE SHARES OFFERED THROUGH BOOK BUILDING, EXCEPT THAT THEY ARE FINANCIAL INSTITUTIONS, MUTUAL FUNDS AND INSURANCE COMPANIES.

LIST OF ASSOCIATED COMPANIES AND UNDERTAKINGS OF THE COMPANY, NAMES OF RELATED EMPLOYEES OF THE COMPANY, THE OFFEROR, LEAD MANAGER AND BOOK RUNNERS ARE PROVIDED IN SECTION 3.22.5.

Once the Bidding Period has lapsed and the book has been built, the, Strike Price shall be determined on the basis of Dutch Auction Method.

Successful Bidders shall be intimated, within one (1) working day of the closing of the Bidding Period, about the Strike Price and the number of shares provisionally allotted to each of them. The Bid Money of Bidders who have undertaken to subscribe the unsubscribed retail portion shall remain deposited or blocked till allotment of unsubscribed retail portion, if any, to them on pro-rata basis. Upon intimation by the Book Runner of the final allocation, successful institutional Bidders shall deposit their balance Margin Money within (3) days of such intimation. Where a successful Bidder defaults in payment of shares allotted to him / her / it, the Margin Money deposited by such Bidder shall be forfeited to the Book Runner.

As per regulation 9(16) of the PO Regulations, the successful Bidders shall be issued shares at the time of issuance of shares to the retail investors. Shares to successful Bidders shall be issued only in the form of book-entry through credit in their respective CDS accounts (Investors Account or Sub-Account). All the Bidders shall, therefore, provide number of their CDS accounts in the Bid application.


Page 98 of 138

The Bidders must fill-in the part of the Bidding Form under the heading, “Dividend Mandate” to enable the Company to directly credit their cash dividend, if any, in their respective International Bank Account Number (IBAN).

12.1.3 Mechanism for Determination of Strike Price

1. At the close of the Bidding period, the Strike Price shall be determined on the basis of Dutch Auction Method by the Designated Institution. Under this methodology, the Strike Price is determined by lowering the price to the extent that the total shares offered under the Bok Building Portion are subscribed.

2. The Order Book shall display the Bid prices in a tabular form in descending order along with the number of shares Bid for and the cumulative number of shares at each price level.

3. As per the regulation 9(12) of the PO Regulation, in case all the Bids made above the Strike Price are accommodated and shares are still available for allotment, such available shares will be allotted on proportionate basis against the Bids made at the Strike Price.

The mechanism for determination of the Strike Price can be understood by the following illustration:

1. Number of shares being Offered through the Book Building: 93,888,000 Ordinary Shares

2. Floor Price: 35/-per Ordinary Share with maximum price band of 40% i.e. PKR 49/- per share

3. Bidding Period: From 22nd June 2021 to 23rd June 2021

4. Bidding Time: 9:00am – 5:00pm

5. Bidding Revision Time (Upward Revision only): 9:00am – 5:00pm on all days

Bidder Price (PKR/share) Quantity Cumulative Number of

shares Category of Order

Institution A 45.00 8,000,000 8,000,000 Limit Price

Institution B 44.50 5,000,000 13,000,000 Limit Price

HNWI A 44.00 7,000,000 20,000,000 Step Bid

Institution C 43.50 8,000,000 28,000,000 Limit Price

Institution D 43.00 8,000,000 36,000,000 Limit Price

Institution E 42.50 4,000,000 40,000,000 Limit Price

HNWI B 42.25 7,000,000 47,000,000 Limit Price

HNWI A 42.00 6,000,000 53,000,000 Step Bid

Institution F 41.75 7,000,000 60,000,000 Limit Price

Institution G 41.50 8,000,000 68,000,000 Limit Price

Institution H 41.25 7,000,000 75,000,000 Limit Price

HNWI C 41.00 5,000,000 80,000,000 Limit Price

Institution I 40.75 4,000,000 84,000,000 Step Bid

Institution H 40.25 7,000,000 84,000,000 Limit Price

HNWI D 40.00 9,888,000 93,888,000 Step Bid

Institution J 39.50 1,500,000 31,500,000 Limit Bid

HNWI E 39.00 1,000,000 32,500,000 Limit Price

Strike Price determine

through Dutch Auction

Method

Bid has been

revised upwards

and placed at PKR

41.25

Total shares bid for at

and above the Floor

Price


Page 99 of 138

On the basis of the figures provided in the above illustration, according to the Dutch Auction Method, the Strike

Price would be set at PKR 40/- per share to sell the required quantity of 93,888,000 Ordinary Shares.

At PKR 45.00 per share, investors are willing to buy 8,000,000 shares. Since 85,888,000 shares are still available, therefore the price will be set lower.













At PKR 40.00 per share, investors are willing to buy 9,888,000 shares. Since after bidding for 9,888,000 shares at PKR 40.00 per share, no shares will be available therefore the Strike Price will be set at PKR 40.00 per share for the entire lot of 93,888,000 shares.

The Bidders who have placed Bids at prices above the Strike Price (which in this illustration is PKR 40.00 per share), will become entitled for allotment of shares at the Strike Price and the differential would be refunded.

In case all the Bids made above the Strike Price are accommodated and shares are still available for allotment, such available shares shall be allotted against the Bids made at the Strike Price on proportionate basis as per regulation 9(12) of the PO Regulations.

The Bidders who have made Bids below the Strike Price shall not qualify for allotment of shares and the Book Runner shall intimate the respective banks for unblocking their Bid Money within one (1) working day of the close of the Bidding period as per regulation 9 (13) of the PO Regulation and the refunds, where required to such Bidders shall be made within three (3) working days from the close of the Bidding period.

Since this Offer is being made through 100% Book Building, as per the regulation 7(4) of the PO Regulation, the

Bidder shall be allowed to place Bids for hundred (100%) percent of the Offer size and the strike price shall be the

price at which hundred (100%) percent of the Offer size is subscribed. However, the successful Bidders would be


Page 100 of 138

allotted and offered only seventy-five (75%) percent of the Offer size and the remaining twenty-five (25%) percent

would be offered to the retail investor. The Bidders shall give an undertaking along with the application that they

would subscribe to the unsubscribed shares, if any, out of the retail portion of the Offer and their remaining Bid

Money would remain deposited/ blocked till allotment of such unsubscribed shares to them on pro-rata basis.

The Bid Money of Bidders shall remain deposited or blocked till allotment of unsubscribed shares, if any, to them on

pro rata basis as per regulation 9(15) of PO Regulation.

In case retail portion of the Offer is fully subscribed, the Bid Money shall be unblocked within one (1) working day

or refunded within three (3) working days of the closing of the public subscription.

12.1.4 Timeframe for intimation to the successful Bidders and mechanism for payment of the balance amount by the successful Bidders

Successful Bidders shall be intimated, within one (1) working day of the closing of the Bidding period, the Strike Price

and the number of shares provisionally allotted to each of them. Upon intimation by the Book Runner of the final

allocation, successful institutional Bidders shall deposit their balance Margin Money within (3) days of such

intimation. Where a successful Bidder defaults in payment of shares allotted to it, the Margin Money deposited

by such Bidder shall be forfeited to the Book Runner.

12.1.5 Lead Manager Arif Habib Limited has been appointed by the Company as Lead Manager of this Offer.

12.1.6 Book Runner to the Offer

Arif Habib Limited having underwriting license has been appointed by the Company as the Book Runner to this Offer.

12.1.7 Interest of the Lead Manager and the Book Runner: The Lead Manager and the Book Runner are deemed to be interested to the extent of fees payable to them by the Company for the services to be rendered by them as Lead Manager and Book Runner to the Offer respectively. The Lead Manager and the Book Runner to the Offer have no other interest in any property or profits of the Company.

Roles and Responsibilities of the Book Runner

The Book Runner to the Offer shall be responsible to:

1. ensure that necessary infrastructure and electronic system is available to accept Bids and to conduct the whole Book Building process in a fair, efficient and transparent manner;

2. ensure blocking of Bid and Margin Money of the Bidders in their respective accounts;

3. the Book Runner must be financially capable for honoring its commitments arising out of defaults by their investors, if any;

4. use the software provided by the Designated Institution for the Book Building on such terms and conditions as may be agreed with the Designated Institution through an agreement in writing;

5. ensure that the software used for Book Building is based on Dutch Auction Method for display of the order book and determination of the Strike Price;

6. ensure that the Bidders can access to the System and can revise their Bids electronically using the user ID and the password;

7. ensure that it has obtained list and Unique Identification Number (UIN) of the associates of the Company, Offeror, the Lead Manager and all the related employees;


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8. ensure that names and UIN of all the persons mentioned under section 3.22.5 are entered and capped in a manner as prescribed in the PO Regulations before commencement of the Bidding Period;

9. ensure that no Bid or Bids exceeding ten percent (10%), in aggregate, is or are made by the associated companies and associated undertakings of the Company & Offeror;

10. ensure that no Bid in aggregate exceeding five per cent (5%) is made by the associated companies and associated undertakings of the Lead Manager and the Book Runner;

11. enter into an underwriting agreement with the Company with respect to underwriting of the Book Building Portion for covering the default risk;

12. establish Bid collection centers at least in Islamabad, all the provincial capitals, Azad Kashmir and Gilgit/ Baltistan;

13. maintain record of all the Bids received; and

14. ensure that all the Bids received in the Bid Collection Centers are entered into the system developed by the Designated Institution for the purpose of Book Building within the prescribed time.

The Book Runner have established Bid collection centers at the following addresses (direct & fax numbers in all

centers).

Bid Collection Centers

The Book Runner has established Bid collection centers at the following addresses:

Karachi

Contact Officer: Daniyal Ahmed Khan Muhammad Ali Raza

Direct No.: 021-38899223 021-32460741

Mobile No.: +92 345 313 5501 +92 335 339 3987

PABX No.: 021 111 245 111 021 111 245 111

Fax No.: 021 3242 9653 021-34302186

Email: [email protected] [email protected]

Postal Address:

Arif Habib Center, 23 MT Khan Road, Karachi Arif Habib Center, 23 MT Khan Road, Karachi

Lahore Islamabad

Contact Officer: Naeem Rana Asad Abbas Najfi

Direct No.: +92 42 3631 3700 +92 51 289 4505


Postal Address: Arif Habib Limited Office No. G-5 & G-6, Ground Floor, LSE Plaza, 19 Khayaban-e-Aiwan-e-Iqbal Lahore

Arif Habib Limited Office No. 506, 5th Floor, ISE Towers, Jinnah Avenue, Islamabad

Faisalabad Peshawar

Contact Officer: Muhammad Naseem Asmat Zeeshan Ahmed

Direct: 041-8531010 091-5253838


Postal Address: Arif Habib Limited Office # 04, Third Floor, Legacy Tower, Near Kohinoor City, Faisalabad

Arif Habib Limited Office # F13-F17, First Floor, The Mall Tower, Peshawar Cantt

Quetta Azad Kashmir

Contact Officer: Nasir Iqbal Adeel Azam

Direct: 081-2840588/0345-8169184 05827-445683


Postal Address: Faysal Bank Limited Shahrah-e-Adalat Road, Quetta

Faysal Bank Limited Ijaz Plaza, Mian Muhammad Road, Opposite,Quaid e Azam Stadium, Azad Kashmir








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Gilgit/Baltistan

Contact Officer: Muzfar Ahmad

Direct: 05811-457381/ 0346-3719228 / 0355-5431910

Email: [email protected]

Postal Address: Faysal Bank Limited ZS Plaza, Shahrah-e-Quaid-e-Azam, Opposite Radio Pakistan, Jutial, Gilgit.

12.1.8 Roles and Responsibilities of the Designated Institution

PSX being provider of the Book Building System (Designated Institution), shall ensure that Book Building System shall

smoothly perform following functions:

1. Record name, UIN, National Tax Number (NTN), postal and email addresses, land line and cell numbers,

International Bank Account Number (IBAN) and branch address and complete CDS Account Number (i.e. Investor

Account Number or Sub-Account Number);

2. Provide a mechanism for registration of the Bidders before commencement of the bidding period till 03:00 p.m.

on the last day of the Bidding Period and require the investors to provide at least such information as mentioned

above;

3. Generate Bidders’ Internet Protocol (IPs) address and keep record of all IP addresses from where the Bids are

placed;

4. Record the number of shares Bid for, the Bid Price, type of the Bid I.e. Limit Bid or Step Bid, date and time of the

entry of the Bid;

5. Display the Bids revised, and date and time of upward revision;

6. Neither allow withdrawal of Bid, nor accept the Bids placed at a Bid Price that is below the Floor Price or above

10% of the Indicative Strike Price at any point of time and above the upper limit of the Price Band;

7. Display live the total number of shares offered for sale, the Floor Price, Price Band, total number of Bids received,

total number of shares Bid for and the indicative Strike Price;

8. Build an order book showing demand for the shares at various price levels in a descending order along with the

accumulated number of shares Bid for and percentage of total shares offered under the Book Building Portion;

9. Discover the Strike Price at the close of the Bidding Period;

10. Generate alerts for the Bidders via Short Message Service (“SMS”) through cell phones and emails upon entry

of the Bid, at the time of upward revision of the Bid, upon variation in the Indicative Strike Price and upon

discovery of the Strike Price; and

11. Ensure that the system must provide the Bidders the option to upward revise their Bids online or through the

Book Runner during the period permitted under these PO Regulations.

The Designated Institution shall ensure that:

─ identity of the Bidder is not displayed; and

─ no Bid is entered into the System after closing of the Bidding Period.

12.1.9 Roles and Responsibilities of the Company:

The Company shall ensure that: 1. the Company, Offeror, its Sponsors, promoters, substantial shareholders, directors and associates shall

have no over dues or defaults, irrespective of the amount, appearing in the report obtained from the credit information bureau;

2. the Company, Offeror or its directors, Sponsors or substantial shareholders should not have held the office of the directors, or have not been Sponsors or substantial shareholders in any company:



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I. which had been declared defaulter by the securities exchange or futures exchange; or

II. whose TRE certificate has been cancelled or forfeited by the securities exchange; or

III. which has been de-listed by the securities exchange due to non-compliance of its regulations. 3. The Lead Manager, Book Runner, Underwriter, Balloter and Share Registrar and Banker to the Offer, are

appointed through separate agreements in writing. 4. It has submitted through its Lead Manager, an application along with draft Offer for Sale Document for

listing of its securities to the PSX. 5. it is in operations for at least 3 financial years.

6. it has profitable track record for at least 2 preceding financial years from its core business activities.

7. not less than 51% of the shares of the Company are held by same persons for at least 2 preceding financial

years.

8. the shares shall be Offered in book-entry form only.

12.1.10 Opening and Closing of the Registration Period

The Registration period shall be for Five (5) working days as under:

REGISTRATION PERIOD

17th June 2021 9:00am to 5:00pm

18th June 2021 9:00am to 5:00pm

21st June 2021 9:00am to 5:00pm

22nd June 2021 9:00am to 5:00pm

23rd June 2021 9:00am to 3:00pm

12.1.11 Opening and Closing of the Bidding Period

The Bidding Period shall be for Two (2) working days as under:

BIDDING PROCESS STARTS ON 22nd June 2021 (9:00 AM to 5:00 PM)

BIDDING PROCESS ENDS ON 23rd June 2021 (9:00 AM to 5:00 PM)

12.1.12 Eligibility to Participate in Bidding

Eligible Investors who can place their Bids in the Book Building process include local and foreign Individual and Institutional Investors whose Bid Amount is not less than PKR 1,000,000/- (Rupees One Million only).

12.1.13 Information for Bidders

1. The Offer for Sale Document for Offer of Shares has been approved by PSX and SECP.

2. The Offer For Sale Document, Registration Forms and the Bidding Forms can be obtained from the Registered Office of PABC, AHL and the designated Bid Collection Centers. Offer For Sale Document, Registration Forms and Bidding Forms can also be downloaded from the following websites i.e. http://www.arifhabibltd.com, http://pkbevcan.com/, www.psx.com.pk & www.cdceipo.com.

3. Eligible Investors who are interested to participate in Bidding for subscribing the Ordinary Shares of the Company should approach the Book Runner at the addresses provided in paragraph 12.1.7 for registration for submitting their Bids.

4. THE REGISTRATION FORMS SHOULD BE SUBMITTED ON THE PRESCRIBED FORMAT AT THE ADDRESSES PROVIDED IN PARAGRAPH 12.1.7. FOR DETAILS ON THE PROCEDURE OF REGISTRATION PLEASE REFER TO PARAGRAPH 12.1.14.


http://www.panthertyres.com/

http://www.psx.com.pk/


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5. THE BIDS SHOULD BE SUBMITTED ON THE PRESCRIBED BIDDING FORM IN PERSON, THROUGH FAX NUMBERS GIVEN IN PARAGRAPH 12.1.7 OR THROUGH THE ONLINE SYSTEM USING THE USER ID AND PASSWORD ISSUED AT THE TIME OF REGISTERATION OF ELIGIBLE INVESTOR.

6. REGISTERED INVESTORS CAN PLACE AND REVISE THEIR BIDS UPWARDS BY ACCESSING THE DESIGNATED INSTITUTIONS ONLINE PORTAL FOR BOOK BUILDING BY USING THE USER ID AND PASSWORD COMMUNICATED TO THEM VIA EMAIL BY PSX.

7. EACH ELIGIBLE INVESTOR SHALL ONLY SUBMIT A SINGLE PAY ORDER, DEMAND DRAFT OR EVIDENCE OF ONLINE TRANSFER OF MONEY ALONG WITH THE REGISTRATION FORM. IT MAY ALSO BE NOTED THAT ONLY A SINGLE PAY ORDER, DEMAND DRAFT OR EVIDENCE OF ONLINE TRANSFER OF MONEY SHALL BE ACCEPTED BY THE BOOK RUNNER ALONG WITH EACH ADDITIONAL PAYMENT FORM.

8. ELIGIBLE INVESTORS WHO ARE ACCOUNT HOLDERS OF FAYSAL BANK LIMITED (THE BANKER TO THE BOOK BUILDING PORTION OF THE OFFER) CAN USE THE ONLINE TRANSFER FACILITY PROVIDED BY FAYSAL BANK LIMITED TO DEPOSIT THEIR BID MONEY TO THE BOOK BUILDING ACCOUNT OPENED AT SEHAR COMMERCIAL BRANCH, KARACHI.

12.1.14 Registration form and Procedure for Registration

1. A standardized Registration Form has been prescribed by the Company. The Registration Form shall be submitted, duly filled in, at the Bid Collection Centers in person on addresses given in paragraph 12.1.7 on the standard Registration Form. The Registration Form shall be serially numbered at the Bid collection centers and date and time stamped at the time of collection of the same from the Bidders.

2. Upon completion and submission of the Registration Form, the Bidders are deemed to have authorized the Company to make necessary changes in the Offer for Sale Document as would be required for finalizing and publishing the Supplement to the Offer for Sale Document in the newspapers in which Offer for Sale Document was published and filing the Supplement with PSX and SECP, without prior or subsequent notice of such changes to the Bidders.

3. The registration procedure under the Book Building process is outlined below:

─ The Registration period shall be for Five (5) working days i.e. 17TH June 2021 to 22nd June 2021 from 9:00 AM to 5:00 PM and from 9:00 AM to 3:00 PM on 23RD June 2021.

─ The Registration Form shall be issued in duplicate signed by the Bidder and countersigned by the Book Runner, with the first copy for the Book Runner and the second copy for the Bidder.

─ The Registration Form shall be duly filled in and signed in duplicate and shall be submitted at the Bid Collection Centers in person, through representative or through fax on addresses and numbers given in paragraph 12.1.7.

─ Upon registration of the Bidders in the System, PSX shall assign and communicate the User ID and Password to the Bidders via email on the email address provided by them in the Registration Form.

─ The Book Runner may reject any Bid for reasons to be recorded in writing provided the reason of rejection is disclosed to such Bidder. Decision of the Book Runners shall not be challengeable by the Bidder or its associates.

─ Bid Amount / Margin Money shall be deposited along with the Registration Form through demand draft, pay order or online transfer through Bidder’s bank account only. In case of Online Transfer, the Bidders are requested to submit a bank receipt evidencing transfer of the Bid money into the Company’s designated bank account. Please note that cash must not be deposited either directly or through online transfer in the Company’s designated bank account.

─ The pay order shall be made in favor of “Pakistan Aluminium Beverage Cans Limited – OFS Book Building Account”. For online transfer the payment shall be made into 3190301900238851 being maintained in Faysal Bank Limited– Sehar Commercial Branch, Karachi. Please note that online transfer facility shall only be allowed to Faysal Bank customers.


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─ Please note that third party instruments will not be accepted for Margin Money.

o In case of intra city payment instruments, the Bidders shall ensure that the payment instruments are made “Payable at any Branch”. Intra city payment instruments that are not made “Payable at any Branch” will not be accepted.

─ The Book Runners shall collect an amount of 100% of the Application Money as Margin Money in respect of Bids placed by Individual Investors.

─ The Book Runners shall collect an amount of not less than 25% of the Application Money as Margin Money in respect of Bids placed by Institutional Investors.

─ The Bidder shall provide a valid email address in the Registration Form so that the relevant ID and password can be emailed to them upon registration.

─ The Bidders can use the User ID and Password to independently place and upward revise their Bids online.

─ The successful Bidders shall be issued shares only in the form of book-entry to be credited in their respective CDS accounts. All the Bidders shall, therefore, provide their CDC account numbers in the Bid application and Registration form.

─ The successful Bidders shall be paid cash dividend, if any announced by the Company, only through direct credit in their respective International Bank Account Number (IBAN). All the Bidders, therefore, must provide their IBANs in the Bid Application and Registration Forms.

12.1.15 Procedure for Bidding

1. A standardized Bidding Form has been prescribed by the Company.

2. Registered Investors can submit their Bids in person or through representatives at the Bid Collection Centers during the bidding dates or can place their bids online at https://bkb.psx.com.pk using the user ID and Password received by them over email upon registration with the Book Runner.

3. The bidding procedure under the Book Building process is outlined below:

─ Bids can be placed either at the “Limit Price” or as a “Step Bid”. The minimum size of a Limit Bid by an Eligible Investor shall not be less than PKR 1,000,000/- (Rupees One Million) and in case of a Step Bid, the amount of any step shall also not be less than PKR 1,000,000/- (Rupees One Million).

─ The investors may place their bids through any of the Bid Collection Centers established pursuant to the requirements of sub-regulation 10 of regulation 8 of the PO Regulations. Please see para 12.1.7 for addresses and contact detail of persons at the Bid Collection Centers.

─ The persons at the Bid Collection Centers shall vet the bid applications and accept only such bid applications that are duly filled in and supported by pay order, demand draft or a bank receipt evidencing transfer of the Bid Money into the Company’s designated bank account.

─ On receipt of bid application in accordance with the aforementioned regulation, the Book Runner shall enter Bid into the System and issue to the Bidder an electronic receipt bearing name of the Book Runner, name of the bidding center, date and time.

─ The bidding shall commence from 09:00 a.m. and close at 05:00 p.m. on all days of the Bidding Period. The bids shall be collected and entered into the system by the Book-Runner till 05:00 p.m. on the last day of the bidding period.

─ The Bidders shall have the right to revise their bids upwards any time either manually through the Bid Collection Centers or electronically through direct access to the system till 05:00 p.m. on the last day of the Bidding Period.

https://bkb.psx.com.pk/


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─ The Bidders shall NOT make downward revision both in terms of Bid Price and Bid Volume provided that in case of upward revision of the Bid Price, the number of shares Bid for i.e. Bid Volume may be adjusted ensuring that the Bid Amount or Bid Money remains the same.

─ The Bidders shall not withdraw the Bids.

─ The Book Runner shall collect full amount of the Bid Amount as Margin Money in respect of bids placed by the High Net worth Individual and not less than twenty-five percent (25%) of the Bid Amount as Margin Money in respect of bids placed by the Institutional Investors.

─ Payment of Margin Money shall be accepted only through demand draft, pay order or online transfer and third party payment instruments shall not be accepted.

─ The Book Runner may on its own discretion accept a bid without Margin Money, provided the Book Building Portion is fully underwritten at least at the Floor Price by the Book Runner.

─ The Book Runner may reject any bid for reasons to be recorded in writing provided the reason of rejection is disclosed to such Bidder. The decision of the Book Runner shall not be challengeable by the Bidder or its associates.

─ PSX shall, through the system, display live throughout the bidding period an order book in descending order showing demand for shares at various prices and the accumulated number of shares bid for along with percentage of the total shares Offered (the “Order Book”). The Order Book should also show the revised bids and the bids withdrawn. The Order Book shall be accessible through websites of PSX.

─ At the close of the Bidding Period, the Strike Price shall be determined on the basis of the Dutch Auction Method.

─ Once the Strike Price is determined, all those Bidders whose bids are found successful shall become entitled for allotment of shares.

─ The Bidders who have made bids at prices above the Strike Price shall be allotted shares at the Strike Price.

─ In case all the bids made above the Strike Price are accommodated and shares are still available for allotment, such available shares will be allotted against the bids made at the Strike Price on proportionate basis as per regulation 9 (12) of PO Regulations. The procedure for allotment of shares to successful Bidders is mentioned in para 12.1.23 of the Offer for Sale Document.

─ The Bidders who have made bids below the Strike Price shall not qualify for allotment of any Ordinary Shares and the Book Runner shall intimate their respective banks for unblocking their Bid Money within one (1) working day of the close of the bidding period and in case of refunds, the refund to such Bidders shall be made within three (3) working days from the close of the bidding period.

─ Successful Bidders shall be intimated, within one (1) working day of the closing of the bidding period, the Strike Price and the number of shares provisionally allotted to each of them. The successful Bidders shall be intimated by the Book Runner of their final allocation after subscription of the retail portion of the Offer.

─ In case the retail portion of the Offer is not fully subscribed, the unsubscribed shares shall be allotted to the successful Bidders on pro-rata basis.

─ In case the retail portion of the Offer is oversubscribed, the allotment shall be made in the manner given in para 12.2.

─ Upon intimation by the Book Runner of final allocation, successful institutional Bidders shall deposit their balance margin within (3) days of such intimation. Where a successful Bidder defaults in payment of shares allotted to it, the Margin Money deposited by such Bidder shall be forfeited to the Book Runner.

─ Final allotment of shares out of the Book Building Portion shall be made after receipt of full subscription money from the successful Bidders; however, shares to such Bidders shall be credited at the time of credit of shares out of the retail portion.


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─ The successful Bidders shall be issued shares only in Book Entry Form to be credited in their respective CDS Accounts. All the Bidders shall, therefore, provide their CDS Account Numbers in the Registration Form.

─ The Designated Institution shall continue to display on its website, the data pertaining to the Book Building and determination of the Strike Price for a period of at least three working days after closure of the Bidding Period.

─ The Book-Runner shall ensure that subscription money received against the bids accepted shall not be released to the Company by the Banker to the Book Building Portion until:

o credit of all shares allotted to retail investors; and

o issuance of NOC by the PSX.

12.1.16 Payment for Book Building Portion

The Company has opened a bank account for collection of applications’ money related to Book Building Portion.

The Bidders shall draw demand draft or pay order in favor of “PAKISTAN ALUMINIUM BEVERAGE CANS LTD. – OFS BOOK BUILDING ACCOUNT” or online transfer of the Bid Money into the respective Book Building account 3190301900238851 and submit the demand draft, pay order or bank receipt at the designated Bid Collection Centers either in person or through facsimile along with a duly filled in Registration Form.

For online transfer the payment shall be made into the Account 3190301900238851 being maintained at Faysal Bank Limited – Sehar Commercial Branch, Karachi with the Account Title “PAKISTAN ALUMINIUM BEVERAGE CANS LTD. – OFS BOOK BUILDING ACCOUNT”. Please note that online transfer facility shall only be allowed for Faysal Bank Limited customers.

CASH MUST NOT BE SUBMITTED WITH THE BIDDING FORM/REGISTRATION FORM AT THE BID COLLECTION CENTER NOR DEPOSITED DIRECTLY OR VIA ONLINE TRANSFER IN THE COMPANY’S DEISGNATED BANK ACCOUNT. BID AMOUNT MUST BE PAID THROUGH PAY ORDER, BANK DRAFT OR ONLINE TRANSFER DRAWN / TRANSFER IN FAVOR OF “PAKISTAN ALUMINIUM BEVERAGE CANS LTD. – OFS BOOK BUILDING ACCOUNT” IN A MANNER ACCEPTABLE TO THE BOOK RUNNER. PLEASE NOTE THAT THIRD PARTY PAYMENT INSTRUMENTS WILL NOT BE ACCEPTED.

The Collection Bank shall keep and maintain the Bid Money in the said account. Once the shares allotted under the retail portion have been credited, the Lead Manager, after obtaining NOC from PSX, may request in writing to the Banker to the Book Building Portion for transfer of the money of the successful and accepted applications to the Company’s account(s).

PAYMENT PROCEDURE

The payment procedures for a Limit Bid or a Step Bid are explained below:

PAYMENT FOR LIMIT BID

If investors are placing their bids as a Limit Bid, then they shall deposit the Margin Money based on the number of shares they are bidding for at their stated Bid Price.

For instance, if an investor is applying for 1 Million shares at a price of PKR 45.00/- per share, then the total Application Money would amount to PKR 45 Million. In such a case, (i) Individual Investor shall deposit PKR 45 Million in the Book Building account as the bid amount which is 100% of PKR 45 Million; and (ii) Institutional Investor shall deposit at least PKR 11.25 Million in the Book Building account as the Margin Money which is 25% of PKR 45 Million.

PAYMENT FOR STEP BID

If an investor is placing a Step Bid which is a series of Limit Bids at increasing prices, then he/she/it shall deposit the Margin Money / Bid Money based on the total number of shares he/she/it is bidding for at his/her/its stated Bid Prices.

For instance, if the investor bids for 0.70 Million shares at PKR 43.00/-per share, 0.60 Million shares at PKR 44.00/-per share and 0.50 Million shares at PKR 45.00/-per share, then in essence the investor has placed one Step Bid comprising three Limit Bids at increasing prices. The Application Money would amount to PKR 79.0 Million, which is


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the sum of the products of the number of shares bid for and the Bid Price of each Limit Bid. In such a case, (i) Individual Investors shall deposit PKR 79.0 Million in the Book Building Account as Margin Money which is 100% of PKR 79.0 Million and (ii) Institutional Investors shall deposit at least PKR 19.75 Million in the Book Building Account as Margin Money which is 25% of PKR 79.0 Million.

12.1.17 Payment by Foreign Investors Companies are permitted under paragraph 6 (with specific reference to sub para (B) (I)) of Chapter 20 of the State Bank of Pakistan’s (“SBP”) Foreign Exchange Manual (the “Manual”) to issue shares on repatriation basis to non-residents who are covered under paragraph 6 (A) of Chapter 20 of the Manual, i.e. (I) A Pakistan national resident outside Pakistan, (II) A person who holds dual nationality including Pakistan nationality, whether living in or outside Pakistan, (III) A foreign national, whether living in or outside Pakistan and (IV) A firm (including a partnership) or trust or mutual fund registered and functioning outside Pakistan, excluding entities owned or controlled by a foreign government, provided the Offer Price, is paid in foreign exchange through normal banking channel by remittance from abroad or out of foreign currency account maintained by the subscriber/purchaser in Pakistan.

Non-residents who wish to bid for the subscription of shares being offered via Book Building can remit the subscription money through an Authorized Dealer directly to the Book Building accounts opened by the Company as given in para 12.1.16 of this Offer For Sale Document, however, those non-residents who wish to subscribe shares out of the general public portion may contact any of the bankers to the offer (retail portion) for taking instructions regarding payment of subscription money against shares offered to general public / retail investors. List of bankers to the Offer for retail portion is available on page 1 and para 13.1.13 of this Offer for Sale Document.

The shares issued to non-resident shareholders shall be intimated by the Company to the designated Authorized Dealer, along with the documents prescribed in the Manual within 30 days of Offer.

Non-residents who are covered under paragraph 6 (A) of Chapter 20 of the Manual do not require SBP’s approval to invest in the shares being offered in terms of this Offer For Sale Document. Furthermore, under paragraph 7 (vii) of Chapter 20 of the Manual the Authorized Dealer shall allow repatriation of dividends, net of applicable taxes and proceeds on sale of listed shares (i.e. divestment proceeds) not exceeding the market value less brokerage/commission on provision of prescribed documents.

Payments made by non-residents shall be supported by proof of receipt of foreign currency through normal banking channels. Such proof shall be submitted along with the Application by the non-residents.

12.1.18 Procedure for Rejection of Bids

In terms of regulation 9 (7) of the PO Regulations, the Book Runner may reject any Bid placed by a Bidder for reasons

to be recorded in writing provided the reason of rejection is disclosed to such Bidder. Decision of the Book Runner

shall not be challengeable by the Bidder or any of its associates.

12.1.19 Time frame for upward revision of Bids by the Bidders

The registered investors may revise their Bids upwards any time either manually through the Bid Collection Centers or electronically through direct access to the system till 05:00 p.m. on the last day of the Bidding Period.

An investor will not be allowed to place or revise a bid with a price variation of more than 10% of the prevailing indicative Strike Price. NO DOWNWARD REVISION BOTH IN TERMS OF BID PRICE AND BID VOLUME IS ALLOWED PROVIDED THAT IN CASE OF UPWARD REVISION OF THE BID PRICE, THE NUMBER OF SHARES BID FOR I.E. BID VOLUME MAY BE ADJUSTED ENSURING THAT THE BID AMOUNT OR BID MONEY REMAINS THE SAME. HOWEVER, NO WITHDRAWAL OF BID IS ALLOWED.

12.1.20 Ten Percent (10%) Price Variation

An investor will not be allowed to place or upward revise a bid with a price variation of more than ten percent (10%) of the prevailing Indicative Strike Price subject to Floor Price and Price Band I.e. Bid Price must not be below the Floor Price and must not exceed 40% of the Floor Price which is upper limit of Floor Price. Please note that the


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Indicative Strike Price may not be constant and may keep on changing during the bidding period. Therefore, the 10% range will also change with the changing Indicative Strike Price.

For Example, if the Floor Price is PKR 35 per share and Indicative Strike Price at any given point in time during the bidding period is PKR 35 per share, registered Bidders may place or revise their Bids at/to any price between PKR 35 per share to PKR 38.5 per share. If at any given point in time during the bidding period, the Indicative Strike Price changes from PKR 35 per share to PKR 36 per share, the registered Bidders may place or upward revise their Bids at/to between PKR 36 per share to PKR 39.6 per share.

Please note that the 10% range on the lower side cannot go below the Floor Price and cannot exceed the upper cap

of 40% of the Floor Price i.e. PKR 49 per share. The price range of 10% applicable at any given point in time during

the bidding period will also be displayed on the bid screen available at the website of PSX.

12.1.21 Restriction on Downward Revision or Withdrawal of Bids by the Bidder

Under regulation (10) (2) (vi) of the PO Regulations the Bidders shall not make downward revision both in terms of

Bid Price and Bid Volume provided that in case of upward revision of the Bid Price, the number of shares Bid for i.e.

Bid Volume may be adjusted ensuring that the Bid Amount or Bid Money remains the same.

Under regulation (10) (2) (vii) of the PO Regulations the Bidders shall not be allowed to withdraw Bids.

12.1.22 Procedure for Withdrawal of Offer

1. In accordance with regulation 8 (16) of the PO Regulations, in case the Company does not receive bids for the number of shares allocated under the Book Building Portion at the Floor Price, the Offer shall be cancelled and the same shall be immediately intimated to the Commission and PSX and the Margin Money shall be refunded to the Bidders immediately but not later than three (3) working days of the closing of the Bidding Period.

2. In accordance with regulation 8 (17) of the PO Regulation, the Book Building process will be considered as cancelled if the total number of bids received is less than forty (40).

12.1.23 Basis of Allotment of Shares

Bidders shall be allowed to place bids for one hundred percent (100%) of the Offer size and the Strike Price shall be the price at which one hundred percent (100%) of the Offer is subscribed via the Dutch Auction Method.

Once the Strike Price is determined, all those Bidders whose bids have been found successful shall be provisionally allotted 75% of the Offer size i.e. 70,416,000 Ordinary Shares.

In order to be a successful Bidder in the Book Building process, the Bid Price would either be higher than the Strike Price or at the Strike Price.

For allocation of shares via Book Building, priority shall be given to the bids placed at the highest price. The Bidders, who have made bids at prices above the Strike Price, will be provisionally allocated 75% of the shares successfully bid for, at the Strike Price. The differential between the Bid Price and Strike Price, would be refunded based on the total number of shares bid for.

Bidders who had placed Bids at the Strike Price will be provisionally allotted seventy-five (75%) of the shares successfully bid for, at the Strike Price, on proportionate basis.

Bids made below the Strike Price shall not qualify for allotment of shares and their Margin Money will be refunded.

Final allotment of shares to the successful bidders would be determined after determination of the public response to the retail portion of the Offer.

In the event the retail portion is undersubscribed, the unsubscribed portion would be allotted to the successful Bidders, on a pro-rata basis as per regulation 11 (5) of the PO Regulation. Excess funds, if any, would be refunded to the Bidders after allotment of the unsubscribed shares.


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Final allotment of shares out of the Book Building portion shall be made after subscription of the retail portion and receipt of full subscription money from the successful Bidders; however, shares to such Bidders shall be issued simultaneously with issuance of shares to retail investors, in the form of book-entry to be credited in their respective CDS Accounts. All the Bidders shall, therefore, provide number of their respective CDS Accounts in the Bid application as required underregulation9(16) of the PO Regulations.

12.1.24 Refund of Margin Money

The Bidders who have made Bids below the Strike Price shall not qualify for allotment of securities and the Book Runner shall intimate their respective banks for unblocking, where required, their Bid Money within one (1) working day of the close of the bidding period as required under regulation 9 (13) of the PO Regulations and the refunds, where required to such Bidders shall be made within three (3) working days from the close of the bidding period.

The Bid Money of Bidders who have undertaken to subscribe the unsubscribed retail portion shall remain

deposited or blocked till allotment of shares of unsubscribed retail portion, if any, to them on pro-rata basis.

12.1.25 Publication of Supplement to the Offer for Sale Document In accordance with regulation11(1) of the PO Regulations within three (3) working days of the closing of the Bidding Period, Supplement to the Offer for Sale Document shall be published at least in all those newspapers in which the Offer for Sale Document was earlier published and also disseminated through PSX.

The Supplement to the Offer for Sale Document would contain information relating to the Strike Price, the Offer Price and Category-wise breakup of the successful Bidders along with the number of shares provisionally allocated to them. Format of the Supplement is given on page 2 of this Offer for Sale Document.

Commencement of the subscription period for the retail portion shall be held at any date(s) within thirty days (30)

of the publication of the Offer for Sale Document but not earlier than seven (7) days of such publication.


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MINIMUM AMOUNT OF APPLICATION AND BASIS FOR ALLOTMENT OF SHARES OUT OF RETAIL

PORTION OF THE OFFER

The basis and conditions for allotment of shares out of the retail portion of the Offer shall be as follows:

1. Application for shares must be made for 500 shares or in multiples of 500 shares only. Applications which are neither for 500 shares nor for multiples of 500 shares shall be rejected.

2. The minimum amount of application for subscription of 500 shares is the Offer Price x 500 shares.

3. Application for shares below the minimum amount shall not be entertained.

4. SUBMISSION OF FALSE AND FICTITIOUS APPLICATIONS IS PROHIBITED AND SUCH APPLICATIONS’ MONEY MAY BE FORFEITED UNDER SECTION 87(8) OF THE SECURITIES ACT, 2015.

5. If the shares offered to the general public are sufficient to accommodate all applications, all applications shall be accommodated.

6. In case retail portion of the Offer, remains unsubscribed, the unsubscribed shares shall be allotted to successful Bidders at the strike price on pro-rata basis.

7. If the shares applied for by the general public are in excess of the shares allocated to them, the distribution shall be made by computer balloting, in the presence of the representative(s) of PSX in the following manner:

─ If all applications for 500 shares can be accommodated, then all such applications shall be accommodated first. If all applications for 500 shares cannot be accommodated, then balloting will be conducted among applications for 500 shares only.

─ If all applications for 500 shares have been accommodated and shares are still available for allotment, then all applications for 1,000 shares shall be accommodated. If all applications for 1,000 shares cannot be accommodated, then balloting will be conducted among applications for 1,000 shares only.

─ If all applications for 500 shares and 1,000 shares have been accommodated and shares are still available for allotment, then all applications for 1,500 shares shall be accommodated. If all applications for 1,500 shares cannot be accommodated, then balloting will be conducted among applications for 1,500 shares only.

─ If all applications for 500 shares, 1,000 shares and 1,500 shares have been accommodated and shares are still available for allotment, then all applications for 2,000 shares shall be accommodated. If all applications for 2,000 shares cannot be accommodated, then balloting will be conducted among applications for 2,000 shares only.

─ After the allotment in the above mentioned manner, the balance shares, if any, shall be allotted in the following manner:

o If the remaining shares are sufficient to accommodate each application for over 2,000 shares, then 2,000 shares shall be allotted to each applicant and remaining shares shall be allotted on pro-rata basis.

o If the remaining shares are not sufficient to accommodate all the remaining applications for over 2,000 shares, then balloting shall be conducted for allocation of 2,000 shares to each successful applicant.

8. If the Offer is over-subscribed in terms of amount only, then allotment of shares shall be made in the following manner:

─ First preference will be given to the applicants who applied for 500 shares;

─ Next preference will be given to the applicants who applied for 1,000 shares;

─ Next preference will be given to the applicants who applied for 1,500 shares;

─ Next preference will be given to the applicants who applied for 2,000 shares; and then


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─ After allotment of the above, the balance shares, if any, shall be allotted on pro rata basis to the applicants who applied for more than 2,000 shares.

9. Allotment of shares will be subject to scrutiny of applications for subscription of shares.

10. Applications, which do not meet the above requirements, or application which are incomplete, will be rejected.

ELIGIBILITY OF INVESTOR FOR INVESTMENT IN THE OFFER

12.1.26 Eligible Investors Include:

1. Pakistani citizens resident in or outside Pakistan or Persons holding dual nationalities including a Pakistani nationality;

2. Foreign Nationals whether living in or outside Pakistan

3. Companies, bodies corporate or other legal entities incorporated or established in or outside Pakistan (to the extent permitted by their constitutive documents and existing regulations, as the case may be);

4. Mutual Funds, Provident / Pension / Gratuity Funds / Trusts, (subject to the terms of the Trust Deed and existing regulations); and

5. Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan.

BENEFITS OF E-IPO

e-IPO has the following benefits:

1. It enables the investors to make application for subscription of shares through the internet without going to

the bank, and waiting in long queues.

2. It is efficient and simultaneously facilitative for both the Company and the investors.

3. It is available for use 24 hours during the public subscription period. 4. If you are registered with PES or CES, you would get SMS alerts for new IPOs.

5. By applying through PES and CES, you can also track your application status.

PROCEDURE FOR OPENING OF CDS ACCOUNT

CDS is the participant (TREC Holders) driven system where sub-accounts are opened by the participants. All new Sub-

Accounts shall only be opened in CDS based on the complete and correct information obtained from the investor as

per the Standardized Account Opening Form (SAOF). The SAOF is part of CDC Regulations and is also placed on CDC’s

website www.cdcpakistan.com. Terms & Conditions contained in the SAOF shall govern the opening and

maintenance of the Sub-Accounts.

The participant before opening a sub-account into CDS should obtain duly filled and signed SAOF from their clients

/ investors along with all necessary documents. Participants to obtain signatures of concerned Sub-Account Holders

/ Authorized Signatories as acknowledgement on the Posted Registration Detail Report generated from CDS after

establishing Sub-Accounts in their names. Participant must ensure that:

1. The sub-account holder is not a minor and fulfils the requirements of the Companies Act, Central Depositories

Act, 1997 and Central Depository Company of Pakistan Limited Regulations in respect of a shareholder of a

company. However, minor through a guardian can open a sub-account.

2. Sub-Account is not in the name of “Trust. The sub-account title for a trust can only be in the name of the

“Trustee”. Example: (Name of Trustee) (Name of Fund / Trustee etc.).

3. A sole proprietorship or a partnership firm cannot open and maintain a sub-account in CDS, however they can

open and maintain a sub-account in the name of sole proprietor or partner(s).

http://www.cdcpakistan.com/


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4. A participant who is a registered securities broker shall not open and/or maintain sub-account in the CDS in its

own name either under its own participant ID or with any other participant”. Non-broker participants may have

sub-accounts with other participant on a need basis.

5. Participant is not required to enter Account Title and Joint Account Holder(s) name manually at the time opening

of new sub account. When the participant enters UIN in the designated field of CDS for the purpose of account

opening, title will be automatically populated in the designated field as mentioned in the UIN database

maintained with NCCPL.

6. Account Title and Joint holder(s) name are not allowed to be amended once inserted in the posted account.

However, a new provision has now been introduced in the CDS for existing accounts where the account title in

the CDS is required to be matched with account title available in UIN database. For matching the account title

of existing sub accounts, participants no longer have to request CDC for updation rights. Participants will now

press the newly added “synchronize” button and the system will update the title (account holder and joint) as

per title(s) mentioned in the UIN database. However, participants shall not use “Synchronize Account Title”

button for Trustee, Minor and Manager to offer accounts.

7. At the time of account opening in case where the account title is different from the UIN database (for e.g.

Trustee accounts, account of the Minors, Manager to the offer etc. needs to be added in account title, a request

letter for by-pass will be required from the participant, signed by their authorized signatories along with the

certified true copies of the relevant supporting documents, enabling them to have the authority to insert the

title other than the title mentioned in the UIN database.

8. Any updation in CNIC / Passport no. / NICOP / Registration no. is not allowed. In case of any change due to

issuance of a new document, written request to be provided to CDC along with submission of certified true copy

of relevant documents. Updation in CDS will be made after necessary changes in NCCPL database.

9. Input of Local mobile number and / or email address is mandatory for opening of Subaccounts in the CDS.

10. Residential status of the account will be linked with the residential status of the Titleholder of the account.

Hence, residential status of joint holders can be different. In case where Residential Status is Repatriable, such

as, Non-Resident Pakistani (Repatriable) / Foreigner (Repatriable), the Title Holder and all Joint Account Holders

must possess the same Residential Status. Further, updation of residential status, as applicable, will be allowed

based on written request of the participant.

11. Zakat status is linked with the Residential Status such that where the user selects the status of Resident

Pakistani, Non-Resident Pakistani (Repatriable) or Non-Resident Pakistani (Non-Repatriable), the Zakat status

needs to be entered. For all other selections it will be automatically marked as ‘Not Applicable’.

12. Zakat status of all account holders in an account should be identical.

13. Subsequent to the opening of sub-account, addition / deletion of joint holder(s) is not allowed.

14. In light of section 79 subsection (3) of the Companies Act, 2017, the person to be nominated shall not be a

person other than the relatives of the sub-account holder, namely, a spouse, father, mother, brother, sister and

son or daughter, including a step or adopted child.

15. In case of Joint Holders, input of nominee detail will not be allowed.

16. Additional Account Title field will be disabled for Updation of account. In case any change is required in

additional account Title field, written request to be provided to CDC along with the relevant documents.

17. In the dividend mandate, Account number, Account title, Name of the Bank & Branch and City name should be

properly mentioned.

18. Permanent Address field is available in addition to the mailing address field in CDS with the selection of city,

province and country (as applicable). While the Residential Status is associated with the city, province and

country fields such that the fields will be enabled or disabled as per the selected Residential Status.

19. In case of individual account, Business / participant address is not allowed in the permanent address field.

20. In case of corporate account, Registered/Head office address should be entered impermanent address field.


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21. Mailing address should be correct and complete i.e. (House #, Street #, Sector / Block /phase/ number, nearest

land mark, area, city, province & country name). In case the permanent address is same as the mailing address,

the participant will be able to copy the same address. The Residential Status is also associated such that the

fields will be enabled or disabled as per the selected Residential Status.

22. Person maintaining sub-accounts, either singly or jointly, must select “INDIVIDUAL” as Shareholder category.

23. Contact person can only be the sub-account holder him / herself (or any of the jointholder(s)). Moreover, a

person in whose name the Power of attorney is issued by the account holder(s) can also be the contact person.

24. Participant may add or update details pertaining to Special Convertible Rupee Account (SCRA) of Sub Account

Holder in case of resident status selected as “Repatriable”.

25. Attorney Details must be recorded in the attorney fields (if applicable).

26. In case of any change in the registration details of the sub-account holders, the respective participant himself

can make necessary changes in the registration details based on their SAOF & internal procedures which must

be framed in light of the Central Depository Company of Pakistan Limited Regulations.

FACILITIES AVAILABLE TO NON-RESIDENT PAKISTAN AND FOREIGN INVESTORS

Companies are permitted under paragraph 6 (with specific reference to sub para (B) (I)) of Chapter 20 of the State Bank of Pakistan’s (“SBP”) Foreign Exchange Manual (the “Manual”) to issue shares on repatriation basis to non-residents who are covered under paragraph 6 (A) of Chapter 20 of the Manual, i.e. (I) A Pakistani national resident outside Pakistan, (II) A person who holds dual nationality including Pakistani nationality, whether living in or outside Pakistan, (III) A foreign national, whether living in or outside Pakistan and (IV) A firm (including a partnership) or trust or mutual fund registered and functioning outside Pakistan, excluding entities owned or controlled by a foreign government, provided the Offer Price, is paid in foreign exchange through normal banking channel by remittance from abroad or out of foreign currency account maintained by the subscriber/purchaser in Pakistan.

Non-residents who wish to bid for the subscription of shares being offered via Book Building can remit the subscription money through an Authorized Dealer directly to the Book Building account opened by the Company as given in section 2.2.16 of this Offer For Sale Document, however, those non-residents who wish to subscribe shares out of the general public portion may contact any of the bankers to the Offer (retail portion) for taking instructions regarding payment of subscription money against shares offered to general public. List of bankers to the Offer for retail portion is available on page 1 and Section 13.1.13 of this Offer for Sale Document.

The shares issued/transferred to non-resident shareholders shall be intimated by the Company to the designated Authorized Dealer, along with the documents prescribed in the Manual within 30 days of Offer/transfer.

Non-residents who are covered under paragraph 6 (A) of Chapter 20 of the Manual do not require SBP’s approval to invest in the shares being offered in terms of this Offer for Sale Document. Furthermore, under paragraph 7 (vii) of Chapter 20 of the Manual the Authorized Dealer shall allow repatriation of dividends, net of applicable taxes and proceeds on sale of listed shares (i.e. divestment proceeds) not exceeding the market value less brokerage/commission on provision of prescribed documents.

Payments made by non-residents shall be supported by proof of receipt of foreign currency through normal banking channels. Such proof shall be submitted along with the application by the non-residents.


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13 APPLICATION AND ALLOTMENT INSTRUCTION

13.1.1 Eligible Investors Include:

6. Pakistani citizens resident in or outside Pakistan or Persons holding dual nationalities including a Pakistani nationality;

7. Foreign Nationals whether living in or outside Pakistan

8. Companies, bodies corporate or other legal entities incorporated or established in or outside Pakistan (to the extent permitted by their constitutive documents and existing regulations, as the case may be);

9. Mutual Funds, Provident / Pension / Gratuity Funds / Trusts, (subject to the terms of the Trust Deed and existing regulations); and

10. Branches in Pakistan of companies and bodies corporate incorporated outside Pakistan.

13.1.2 APPLICATION MUST BE MADE ON SECP’s APPROVED APPLICATION FORM OR A LEGIBLE PHOTOCOPY THEREOF ON A PAPER OF A4 SIZE WEIGHING AT LEAST 62 GM

13.1.3 Copies of Offer for Sale Document

Copies of this Offer for Sale Document and Applications Forms can be obtained from members of PSX, the Bankers to the Offer and their branches, the Lead Manager, the Book Runner to the Offer and registered office of the Company. The Offer for Sale Document and the Application Form can also be downloaded from the following websites:

http://www.arifhabibltd.com, http://pkbevcan.com/, www.psx.com.pk & www.cdceipo.com;

Shares against the successful and accepted applications shall be issued in the Book Entry Form only and will be

credited into the Applicants CDS Account mentioned in the Application. The applicants, therefore, must provide

detail of their CDS Account (investors Account or Sub-Account) in the Shares Subscription Form. Investors who

do not have CDS account may visit www.cdcpakistan.com for information and details. For further

guidance and queries regarding opening of CDS account, investors may contact CDC at phone Number:

0800 – 23275 (CDCPL) and e-mail: [email protected].

NAMES(S) AND ADDRESS(ES) MUST BE WRITTEN IN FULL BLOCK LETTERS, IN ENGLISH AND SHOULD NOT BE

ABBREVIATED

ALL APPLICATIONS MUST BEAR THE NAME AND SIGNATURE CORRESPONDING WITH THE ONE RECORDED WITH

THE APPLICANT’S BANKER. IN CASE OF DIFFERENCE OF SIGNATURE WITH THE BANK AND COMPUTERIZED

NATIONAL IDENTITY CARD (CNIC) OR THE NATIONAL IDENTITY CARD FOR OVERSEAS PAKISTANI (NICOP) OR

PASSPORT, BOTH THE SIGNATURES SHOULD BE AFFIXED ON THE APPLICATION FORM.

13.1.4 OPENING AND CLOSING OF THE SUBSCRIPTION LIST

The subscription list will open at the commencement of banking hours on 29th June 2021 and will close on 30th June

2021 at the close of banking hours. Please note that online applications can be submitted 24 hours during the

subscription period which will close at 12:00 midnight on 30thJune 2021.

13.1.5 E-IPO SYSTEM

E-IPO refers to electronic subscription of applications for subscription of securities offered in an IPO. The following

three systems are available for e-IPOs:

(iii) PSX’s e-Initial Public Offering System (PES):


http://pkbevcan.com/,%20www.psx.com.pk%20&


http://www.cdcpakistan.com/



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In order to facilitate investors, the Pakistan Stock Exchange Limited (“PSX”) has developed an e-IPO System (“PES”)

through which applications for subscription of securities offered to the general public can be made electronically.

PES can be accessed through the web link ‘eipo.psx.com.pk’. Payment of subscription money can be made through

1LINK or NIFT.

For making application though PES, investors must be registered with PES. The PES registration form is available 24/7,

all throughout the year. Registration is free of cost and can be done by:




Similarly, an e-IPO application can be filed by:




Registered investors with PES can submit their applications through the web link, ‘eipo.psx.com.pk’, 24 hours a day

during the subscription period which will close at midnight on 30th June 2021.

For further guidance and queries regarding PES, investors may contact PSX at phone number 111-001-122 or (021)-

35274401-10, and email ‘[email protected]’.

Investors who are registered with CES can submit their applications through the web link www.cdceipo.com 24 hours

a day during the subscription period which will close at midnight on 30th June 2021.

13.1.6 APPLICATIONS MADE BY INDIVIDUAL INVESTORS

1. In case of individual investors, an attested photocopy of CNIC (in case of Resident Pakistanis) / NICOP or Passport (in case of Non-Resident Pakistanis) as the case may be, should be enclosed and the number of CNIC / NICOP / Passport should be written against the name of the applicant. Copy of these documents can be attested by any Federal / Provincial Government Gazette Officer, Councilor, Oath Commissioner or Head Master of High School or bank manager in the country of applicant’s residence.

2. Original CNIC / NICOP / Passport, along with one attested photocopy, must be produced for verification to the Banker to the Offer and the applicant’s banker (if different from the Banker to the Offer) at the time of presenting the application. The attested photocopy will, after verification, be retained by the bank branch along with the application.

(iv) Centralized e-IPO System (CES): CES can be accessed through the web link (www.cdceipo.com). Payment of subscription money can be made through

1LINK’s member banks available for CES.

For making application though CES, investors must self-register with CES.

For further guidance and queries regarding CES and opening of CDS account, investors may contact CDC at phone

number: 0800 – 23275 (CDCPL) and e-mail: [email protected] or Mr. Farooq Ahmed Butt at Phone 021-34326030

and email: [email protected]

http://eipo.psx.com.pk/

https://eipo.psx.com.pk/






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13.1.7 APPLICATIONS MADE BY INSTITUTIONAL INVESTORS

1. Applications made by companies, corporate bodies, mutual funds, provident / pension / gratuity funds / trusts and other legal entities must be accompanied by an attested photocopy of their Memorandum and Articles of Association or equivalent instrument / document. Where applications are made by virtue of Power of Attorney, the same should also be submitted along with the application. Any Federal / Provincial Government Gazette Officer, Councilor, Bank Manager, Oath Commissioner and Head Master of High School or bank manager in the country of applicant’s residence can attest copies of such documents.

2. Attested photocopies of the documents mentioned in [……] (i) must be produced for verification to the Banker to the Offer and the applicant’s banker (if different from the Banker to the Offer) at the time of presenting the application. The attested copies, will after verification, be retained by the bank branch along with the application.

13.1.8 ADDITIONAL INSTRUCTIONS FOR INVESTORS

1. Only one application will be accepted against each account, however, in case of joint account, one application may be submitted in the name of each joint account holder.

2. Joint application in the name of more than two persons will not be accepted. In case of joint application each applicant must sign the application form and submit attested copies of their CNICs / NICOP / Passport. The share certificates will be dispatched to the person whose name appears first on the application form while in case of CDS, it will be credited to the CDS account mentioned on the face of the form and where any amount is refundable, in whole or in part, the same will be refunded by cheque or other means by post, or through the bank where the application was submitted, to the person named first on the application form, without interest, profit or return. Please note that joint application will be considered as a single application for the purpose of allotment of shares.

3. Subscription money must be paid by check drawn on applicant’s own bank account or pay order / bank draft payable to one of the Bankers to the Offer “Pakistan Aluminium Beverage Cans Limited – OFS Public Subscription” and crossed “A/C PAYEE ONLY”.

4. For the applications made through pay order / bank draft, it would be permissible for a Banker to the Offer to deduct the bank charges while making refund of subscription money to unsuccessful applicants through pay order / bank draft individually for each application.

5. The applicant should have at least one bank account with any of the commercial banks. The applicants not having a bank account at all (non-account holders) are not allowed to submit application for subscription of shares.

6. Applications are not to be made by minors and / or persons of unsound mind.

7. Applicants should ensure that the bank branch, to which the application is submitted, completes the relevant portion of the Application Form.

8. Applicants should retain the bottom portion of their Application Forms as provisional acknowledgement of submission of their applications. This should not be construed as an acceptance of the application or a guarantee that the applicant will be allotted the number of shares for which the application has been made.

9. Making of any false statements in the application or willfully embodying incorrect information therein shall make the application fictitious and the applicant or the bank shall be liable for legal action.

10. Bankers to the Offer are prohibited to recover any charges from the subscribers for collecting subscription applications. Hence, the applicants are advised not to pay any extra charges to the Bankers to the Offer.

11. It would be permissible for a Banker to the Offer to refund subscription money to unsuccessful applicants having an account in its bank by crediting such account instead of remitting the same by cheque, pay order or bank draft. Applicants should, therefore, not fail to give their bank account numbers.


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12. Submission of false and fictitious applications is prohibited and such applications’ money may be forfeited under

section 87(8) of the Securities Act, 2015.

13.1.9 ADDITIONAL INSTRUCTIONS FOR FOREIGN / NON-RESIDENT INVESTORS

1. In case of foreign investors who are not individuals, applications must be accompanied with a letter on applicant's letterhead stating the legal status of the applicant, place of incorporation and operations and line of business. A copy of Memorandum of Association or an equivalent document should also be enclosed, if available. Where applications are made by virtue of Power of Attorney, the same must be lodged with the application. Copies of these documents can be attested by the bank manager in the country of applicant's residence.

2. Foreign / Non- resident investors should follow payment instructions given in Section 12.1.17 of this Offer for

Sale Document.

13.1.10 CODE OF OCCUPATION OF INVESTORS/APPLICANTS

Code Occupation

01 Business

02 Business Executive

03 Service

04 Housewife

05 Household

06 Professional

07 Student

08 Agriculturist

09 Industrialist

10 Other

13.1.11 NATIONALITY CODE

Code Name of Country

001 U.S.A

002 U.K

003 U.A.E

004 K.S.A

005 Oman

006 Bangladesh

007 China

008 Bahrain

009 Other

13.1.12 BASIS OF ALLOTMENT

The basis and conditions of transfer of shares to the General Public shall be as follows:

1. The minimum value of application will be calculated as Offer Price x 500 shares. Application for amount below the minimum value shall not be entertained.

2. Application for shares must be made for 500 shares or in multiple of 500 shares only. Applications which are neither for 500 shares nor for multiples of 500 shares shall be rejected.

3. Allotment / Transfer of shares to successful applicants shall be made in accordance with the allotment criteria / instructions disclosed in the Offer for Sale Document.


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4. Allotment of shares shall be subject to scrutiny of applications in accordance with the criteria disclosed in the Offer for Sale Document and / or the instructions by the Securities & Exchange Commission of Pakistan.

5. Applications, which do not meet the above requirements, or applications which are incomplete will be rejected. The applicants are, therefore, required to fill in all data fields in the Application Form.

6. The Company will credit shares in the CDS Accounts of the successful applicants.

13.1.13 LIST OF BANKERS TO THE OFFER

Code Name of Bank

01 Allied Bank Limited

02 Askari Bank Limited

03 Bank Alfalah Limited

04 Faysal Bank Limited

05 Habib Bank Limited

06 Habib Metropolitan Bank Limited

07 Meezan Bank Limited

REFUND/UNBLOCKING OF SUBSCRIPTION MONEY TO UNSUCCESSFUL APPLICANTS

As per the regulation 11(4) of the PO Regulations, within ten (10) working days of the close of public subscription

period the Shares shall be allotted and issued against the accepted and successful applications and the subscription

money of the unsuccessful applicants shall be unblocked/ refunded.

As per sub-section (2) of Section 68 of the Companies Act, if refund as required under sub-section (1) of Section 68

of the Companies Act is not made within the time specified hereinabove, the directors of the Company shall be

jointly and severally liable to repay that money with surcharge at the rate of two percent (2%) for every month or

part thereof from the expiration of the fifteenth day and, in addition, shall be liable to a penalty of level 3 on the

standard scale as defined in Section 479 of the Companies Act. Provided that the directors of the Company shall not

be liable if it proves that the default in making the refund was not on their own account and was not due to any

misconduct or negligence on their part.

In case retail portion of the Offer remains unsubscribed, the unsubscribed shares shall be allotted to the successful

Bidders in the Book Building.

MINIMUM AMOUNT OF APPLICATION

As per PO Regulations, the minimum amount of bid shall be 500 shares x Strike price.

ISSUE AND CREDIT OF SHARE CERTIFICATES

Within ten (10) working days of the closing of public subscription period, the shares shall be allotted, issued and credited against the accepted and successful applications and the subscription money of the unsuccessful applicants shall be unblocked/refunded, as required under regulation 11(4) of the PO Regulations. Shares will be issued only in the book-entry form and will be credited into the respective CDS Accounts of the successful applicants. Therefore, the applicants must provide their CDS Account Number in the Shares Subscription Applicant.

If the Company defaults in complying with the above requirements, it shall pay PSX a penalty of PKR 5,000 per day for every day during which the default continues. PSX may also notify the fact of such default and name of the Company by notice and also by publication in its ready-board quotation of the Stock Exchange.

Name of the Company will also be notified to the TRE Certificate Holders of the PSX and placed on the web site of

the PSX.


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TRANSFER OF SHARES

The shares shall be transferred in accordance with the provisions of Section 74 of the Companies Act read with Section 75 thereof and the Central Depositories Act, 1997 and the CDCPL Regulations.

LIST OF BANKERS TO THE ISSUE:

Code Name of Bank

01 Allied Bank Limited

02 Askari Bank Limited

03 Bank Alfalah Limited

04 Faysal Bank Limited

05 Habib Bank Limited

06 Habib Metropolitan Bank Limited

07 Meezan Bank Limited

INTEREST OF SHAREHOLDERS

None of the holders of the Offered shares of the Company have any special or other interest in the property or

profits of the Company other than their capacity as holder of Ordinary Shares except from the shareholders who are

also the Director of the Company. Directors of the Company have interest in receiving remuneration for their role

as Directors.

ELIGBILITY FOR DIVIDEND

The Ordinary Shares issued shall rank pari-passu with the existing shares in all matters of the Company, including the right to such bonus or right issues, and dividend as may be declared by the Company subsequent to the date of issue of such shares.

DEDUCTION OF ZAKAT

Income distribution will be subject to deduction of Zakat at source, pursuant to the provisions of Zakat and Ushr Ordinance, 1980 (XVIII of 1980) as may be applicable from time to time except where the Ordinance does not apply to any shareholder or where such shareholder is otherwise exempt or has claimed exemption from payment / deduction of Zakat in terms of and as provided in that Ordinance.

CAPITAL GAINS TAX

Capital gains derived from the sale of listed securities are taxable in the following manner under section 37A of Income Tax Ordinance, 2001:

S. No. Capital Gain Tax for FY 19 Filer Non-Filer

1 Applicable Capital Gain Tax Rate 15% 30%

WITHHOLDING TAX ON DIVIDENDS

Dividend distribution to shareholders will be subject to withholding tax under section 150 of the Income Tax

Ordinance, 2001 as specified in Part III Division I of the First Schedule of the said ordinance or any time to time

amendments therein. In terms of the provision of Section 8 of the said ordinance, said deduction at source, shall be

deemed to be full and final liability in respect of such profits in case of persons only. Applicable withholding tax rate

on dividend is 15%


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TAX ON BONUS SHARES

As per section 236M of the Income Tax Ordinance 2001, amended vide Finance Act 2018-19, tax on issue of bonus

shares has been omitted and will not be applicable from 1st July 2018 and onwards.

INCOME TAX

The income of the Company is subject to Income Tax under the Income Tax Ordinance, 2001.

DEFERRED TAXATION

Deferred tax is accounted for using the balance sheet liability method in respect of on temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable income. Deferred tax is calculated by using the tax rates enacted at the balance sheet date. In this regard, the effect on deferred taxation of the portion of income subjected to Final Tax Regime is adjusted in accordance with the requirements of Accounting Technical Release – 27 of the Institute of Chartered Accountants of Pakistan, if considered material.

Deferred tax liability is recognized for all taxable temporary differences and deferred tax assets recognized for all deductible temporary differences and carry-forward of unused tax losses and unused tax credits, if any, to the extent that it is probable that future taxable profit will be available against which these can be utilized.

Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Significant management judgement is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

SALES TAX

General Sales Tax is applicable as per Sales Tax Act, 1990 on supplies and services. Sales tax is applicable on services as per Punjab Sales Tax on Services Act, 2012 by Punjab Revenue Authority. Sales tax is applicable on services as per Sindh Sales Tax on Services Act, 2011 by Sindh Revenue Board.

SALES TAX ON SALE / PURCHASE OF SHARES

Under the Constitution of Pakistan and Articles 49 of the 7th NFC Award, the Government of Sindh, Government of Punjab, Government of Khyber Pakhtunkhwa and Government of Baluchistan have promulgated the Sindh Sales Tax on Services Act, 2011, Punjab Sales Tax on Services Act, 2012, Khyber Pakhtunkhwa Sales Tax on services through Khyber Pakhtunkhwa Finance Act, 2013 and the Baluchistan Sales Tax on services Act, 2015 respectively. The Sindh Revenue Board, the Punjab Revenue Authority, and the Khyber Pakhtunkhwa Revenue Authority and the Baluchistan Revenue Authority administer and regulate the levy and collection of the Sindh Sales Tax (“SST”), Punjab Sales Tax (“PST”), Khyber Pakhtunkhwa Sales Tax (“KST”) and Baluchistan Sales Tax (“BST”) respectively on the taxable services provided or rendered in Sindh, Punjab or Khyber Pakhtunkhwa provinces respectively.

The value of taxable services for the purpose of levy of sales tax is the gross commission charged from clients in

respect of purchase or sale of shares in a Stock Exchange. The above mentioned Acts levy a sales tax on Brokerage

at the rate of 13% in Sindh, 16% in Punjab and in Baluchistan and Khyber Pakhtunkhwa the rate is 15%. Sales tax

charged under the aforementioned Acts is withheld at source under statutory requirements.

TAX CREDIT FOR INVESTMENT IN IPO

Under Section 62 of the Income Tax Ordinance, 2001, a resident person other than a Company, shall be entitled to a tax credit, as mentioned in the said section, for a tax year in respect of the cost of acquiring in the year, new shares issued to the public by a public company listed on a stock exchange in Pakistan, provided the resident person is the original allottee of the shares or the shares are acquired from the Privatization Commission of Pakistan.

As per section 62(3)(b) of the Income Tax Ordinance, 2001, the time limit for holding shares has been designated as

24 months to avail tax credit.


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14 SIGNATORIES TO THE OFFER FOR SALE DOCUMENT

-sd- -sd- ____________________ ____________________ Simon Michael Gwyn Jennings Chairman/Non-Executive Director

Muhammad Abdullah Yusuf Co-Chairman/Non-Executive Director

-sd- -sd- ____________________ ____________________ Azam Sakrani Alexandra Frances Autrey Chief Executive Officer & Executive Director Non-Executive Director -sd- -sd- ____________________ ____________________ Zain Ashraf Mukaty Muhammad Jawaid Iqbal Non-Executive Director Independent Director -sd- ____________________ Ejaz Ahmed Independent Director

Signed by the above in presence of witnesses:

Witness 1: Witness 2: -sd- -sd- ____________________ ____________________ Adnan Shaikh Muhammad Shehroze Chief Financial Officer & Company Secretary Deputy Manager Finance

Date: [•]


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15 SIGNATORIES OF COMPANY


Witness 1: Witness 2: -sd- -sd- ____________________ ____________________ Muhammad Shehroze Deputy Manager Finance

[.] [.]

Date: [•]

____________________ ____________________ Azam Sakrani Adnan Shaikh Chief Executive Officer Chief Financial Officer & Company

Secretary


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16 SIGNATORIES OF OFFEROR


Witness 1: Witness 2: -sd- -sd- ____________________ ____________________ […] […]

[….] [….]

Date: [•]

____________________ Soraj Bissoonauth Director PABC Mauritius PABC Limited


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17 MEMORANDUM OF ASSOCIATION


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*


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18 BOOK BUILDING REGISTRATION FORM


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19 BIDDINGFORM


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20 GENERAL SUBSCRIPTION FORM


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Onsiidated PAKISTAN ALUMINIUM BEVERAGE CANS LIMITED …

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