Fintech looks at 20pc stake in logistics company – Business
KARACHI: Universal Network Systems Ltd (UNSL) – a logistics firm operating under the brand name BlueEX – said on Monday that an unnamed fintech has offered to buy a 20 percent stake in the company.
The transaction size would be around Rs 300 million if the deal took place at the current share price of Rs 55 apiece. The company is currently valued at just over NOK 1.5 billion.
Talking to SunriseUNSL Chief Financial Officer Salman Hameed said the unnamed fintech is looking to work with an “already established company” in the logistics segment.
The potential buyer will now start the company’s due diligence, which is the formal name for the assessment of assets and liabilities carried out before the actual transaction.
UNSL is one of the three firms currently listed on the Pakistan Stock Exchange’s Growth Enterprise Market or GEM counter – a side table of the exchange reserved for smaller and riskier businesses.
“Companies in the logistics sector become competitive based on the effective use of technology. There is a lot of growth potential for companies that know how to use technology for better service delivery, says Hameed.
UNSL was incorporated in 2005 as a domestic cargo consolidator. It shifted its focus towards e-commerce logistics in 2011 and carried out the country’s first cash-on-delivery shipment under the BlueEX brand.
In November 2021, UNSL sold a quarter of its stake to institutional investors and high net worth individuals at a rate of Rs 65 per share to raise Rs 446 million. The aim was to generate funds for the infrastructure expansion of the company, which aimed to take the number of nationwide distribution hubs from 35 to 160 in three years.
The company’s top line stood at Rs1.1 billion in 2021-22, up 10.8pc from a year ago. Net income fell by 52 per cent in the same year to Rs 15.9 crore, mainly due to a disproportionately high increase in selling, general and administrative expenses.
Transport contributes 22.3 per cent to the service sector’s GDP and amounts to approx. 6 percent of the country’s total employment.
According to research company officials shared at a briefing held for stock analysts last week, revenue in the country’s e-commerce market is projected to reach $7.6 billion by the end of 2022. The sector-wide top line is expected to grow at an annual rate of 6, 1 percent between 2022 and 2025, which means the projected market volume will be $9.1 billion three years later.
The number of e-commerce users in Pakistan is likely to cross 65 million by 2025, while user penetration, which is 23.9 percent in 2022, is expected to reach 26.9 percent by 2025.
Published in Dawn, November 29, 2022
