Amreli to invest Rs 3.4 billion to expand its production
KARACHI: Amreli Steel Chairman Abbas Akberali has said the total cost of current expansion of the production unit of steel manufacturing is about Rs 3.4 billion, as it already achieved nearly 100% capacity utilisation of the existing plant and facilities with last five years’ sales growth (CAGR) of 30% per annum.
The expansion project is expected to complete in less than two years. Bank Alfalah and AKD Securities acted as joint lead managers and arrangers in this landmark transaction to raise funds for expansion of production unit of the cement producing company.
Speaking as guest at the Karachi Stock Exchange, Abbas Akberali performed the Opening Bell Ceremony on the occasion of listing of Amreli Steels Limited (ASL).
ASL had offered 74,252,857 ordinary shares, representing 25% of total post IPO paid up capital of the company with 55,502,857 ordinary shares through the book building process at a floor price of Rs 24 per share and 18,750,000 ordinary shares for general public at the strike price determined via book building. The company achieved strike price of Rs 51 per share through book building, thus raising a total of Rs 3,786.896 million from book building and public offer.
Akberali said that the principal purpose for raising this long term funding from the capital market is to expand the company’s steel melting capacity from 200,000 tonnes per annum to 350,000 tonnes per annum and re-rolling mills capacity from 180, 000 tonnes to 480,000 tons per annum.
Amreli Steels was established in 1972 and was the first to set up an automated rolling mill in Pakistan in 1984. The company introduced Thermo Mechanical Treatment technology in Pakistan in 2008 and earthquake resistant re-bars in the country in 2009. Additionally, ASL set up the first steel melting shop in the private sector in 2011 with a capacity of over 200,000 tonnes per annum.