Alif Group to acquire C&A Textiles

Alif Group has reached an agreement with C&A Textiles to take over the firm that has not been in production for a long time.

In a media call, arranged by the Alif Group to disclose details on the acquisition, Alif Group's Managing Director Azimul Islam said, "Previously we have bought CMC Kamal Textile and Sajeeb Industries which is currently doing rather well under Alif Group. Likewise, we want to take C&A Textile forward."   

Responding to a query on if there is any ill intent behind the decision to acquire the company, Azimul responded saying, "No business can grow with ill-motives."

C&A Textiles' share price rose by 221% from Tk 2.20 as news of the acquisition started to spread.

Denying involvement behind the increase in share prices, Azimul Islam said, "Talks to acquire the company began in September. We have not discussed this issue with anyone until today. We are not involved in raising the share price of this company in the stock market." 

Earlier, the group announced the acquisition of Central Pharma and BD Welding, which are listed on the stock exchange. This led to a significant increase in the share price of those companies. But later the group backed away from the acquisition decision.

The Bangladesh Securities and Exchange Commission (BSEC) also fined Alif Group's managing director and others for manipulating shares of Legacy Footwear.

Asked about these issues, Azimul Islam said there were several problems with the acquisition of Central Pharma and BD Welding. So we did not proceed. 

"However, we made a mistake as we didn't secure approval from the regulatory body BSEC. But this time we didn't make the same mistake. We have proceeded after getting the nod from the regulatory body," he said.

"We wanted to buy shares of Legacy Footwear and get to its board. If we wanted to manipulate, we would not buy shares in our name," he defended his position adding, "If we do it right, the money will follow. You don't have to run after it. "

Alif Group started its business in the country in 1967 through oil trading. From there, the scope of business expanded in various sectors including readymade garments, textiles, yarn, financial institutions, the housing sector, electronic media, education and technology. The group earns about Tk2,500 crore a year.

In a presentation on C&A Textile, it was said that the company's factory in the BSCIC area of Chattogram closed down in 2016. By 2021, the company is under loans amounting to Tk 250 crore with interests and other debts standing at around Tk22 crore.

Alif Group managing director said that initially, they will deposit Tk30-50 crore as share money deposit. 

"This money will be used for rescheduling loans and restoration of gas connections to factories," he said and hoped that it would be possible to reopen the factory by February next year.

"The money deposited as share money deposit will be converted into shares. If the 30 per cent share quota is not met, more shares will be bought from the secondary market," he said.

Earlier, in 2020, the Managing Director of C&A Textiles Ltd, Rukshana Morshed was arrested in Chattogram in a case filed over a defaulted loan.

Sources at the police station said, C&A Textiles borrowed around Tk20 crore from Union Capital in 2013, but it did not repay the loan on time. Union Capital filed a case in 2019 at the money loan court (Artha Rin Adalat). A warrant was subsequently issued against Rukshana Morshed over the defaulted loan.

Chittagong-based company C&A Textiles, listed with the Dhaka Stock Exchange (DSE), floated 4.5 crore ordinary shares worth Tk10 each and raised Tk45 crore through an Initial Public Offering to purchase machinery, construct buildings and repay bank loans in 2015.

The BSEC also found that C&A Textile's Managing Director, Rukshana Morshed, Director, Sharmin Akther Lovely and Bangladesh Shoes Industries Limited had together sold around 1.22 crore shares of the company without prior declaration, earning around Tk12 crore from these sales.

As a penalty for violating several rules, the securities regulator has imposed a Tk19 crore fine on the company's directors, also banning them from assuming the roles of directors at any other listed company.