ICI Pakistan to separate its paint business- Alfalah Securities Limited

Karachi: ICI Pakistan Ltd. (ICI), in order to restructure its business, has decided to divide its company into two entities both of which will be listed on all the stock exchanges of Pakistan.

According to Alfalah Securities Limited, one entity will be AkzoNobel Pakistan having the paint business and the other will be ICI Pakistan Ltd. comprising of the remaining businesses. The Paints business will be separated through demerger, contingent upon the approval of the shareholders, regulators and Sindh High Court.

The paint business has been functioning efficiently and major automotive companies like Pak Suzuki Motor Co., Indus Motors, Millat Tractors and Al-Ghazi Tractor as well as Hino and Nissan are their major clients. In CY10, ICI reported turnover of PkR 38.5 bn of which paint business contributed PkR 6.5 bn or ~17%. The operating margin of Paint business remained at 2% against total company’s operating margin of 9.29%. Overall the profit after tax stood at PkR 2.43 bn (EPS: PkR 17.5). Alfalah Securities Limited believes that the demerger would improve the financial performance of ICI and new listing would provide investors another avenue for investment in the stock market.

Leave a Reply