Alif Industries strikes deal to acquire Royal Denim
The acquisition is projected to increase the company’s annual revenue by Tk216 crore and profit by Tk20 crore, said the company
Alif Industries, a listed firm on the stock exchange, has signed a deal to acquire Royal Denim Limited, a 100% export-oriented, non-listed company.
The acquisition is projected to increase the company's annual revenue by Tk216 crore and profit by Tk20 crore, said the company.
Alif Industries made a revenue of around Tk85 crore and a profit of Tk10.44 crore for fiscal year 2023-24.
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According to a disclosure on the stock exchanges' websites yesterday, Royal Denim produces 100% export-oriented denim fabrics with a present capacity of 750,000 yards in a month, located at Cumilla Export Processing Zone.
Alif Industries in the disclosure states that the mode of financing shall be from own and bank financing. Until the completion of the takeover, Alif Industries shall run business operations and marketing of the company, adopt the business strategy, and take care and attend necessary all monthly overhead and payment from outstanding dues, if required, the disclosure reads.
Azimul Islam, managing director of Alif Industries, told the Business Standard, "We will take over the firm, which will strengthen the financial base of Alif Industries."
10% cash and 10% stock dividend recommended
The textile firm recommended a 10% cash dividend only for its general shareholders, and 10% stock dividend for all shareholders for FY24.
That means sponsor-directors will not receive cash dividend, and general shareholders will get both cash and stock dividend.
In FY23, it had paid a 17% cash dividend to its shareholders.
Its share price jumped by 10.77% to Tk79.20 each on the Dhaka Stock Exchange (DSE) yesterday.
Azimul Islam also said, "With the recommendation of dividends, the payout ratio of the company will be more than 90%. More or less, the company's dividend payout ratio was around 80-90%."
Amalgamation of Alif Manufacturing to continue
Alif Manufacturing Company Ltd, another textile company listed on the Dhaka and Chittagong bourses, is run by common management under Alif Group.
A year ago, on 25 September 2023, the owners decided to amalgamate Alif Industries with Alif Manufacturing.
Not only that, Alif Industries also on 23 July 2023 decided to amalgamate C&A Textile, another listed firm, which remained closed for years and resumed operation under Alif Group.
Now, Alif Industries informed that the execution of the amalgamation of Alif Manufacturing with Alif Industries to be continued as previously declared.
However, the execution of the amalgamation of Alif Industries and C&A Textiles will remain on hold.
The Bangladesh Securities and Exchange Commission (BSEC) under the new chairman and commissioners cancelled the raising of Tk300 crore issuing bond, and Tk200 crore issuing fresh shares to the owners of Alif Industries.
Now, Alif Industries has submitted a review application to the commission to reinstate the issuance of the bond and raising of capital through share issuance.
The company said its raising of funds was an integral part of reviving C&A Textiles as per the proposal of Alif Group approved by the BSEC on 7 October 2021.
If the capital raising through bond and share issuance is not allowed, the fate of C&A Textile will hang in the balance, officials of the company said.
