Lanka's Textured Jersey to buy Indian firm for $15 mn

01 Jul '15

2 min read

Sri Lanka's knitted fabric manufacturer Textured Jersey Lanka (TJL) has said it will acquire a controlling stake in an Indian knit fabric manufacturer, Ocean India Pvt Limited for $15 million, the Sri Lankan media has reported.

The TJL, subject to obtaining necessary corporate and regulatory approval, will buy all 35.63 million shares of Ocean Mauritius Ltd., the parent firm of Ocean India, which operates a knit fabric manufacturing plant in Visakhapatnam.

TJL will pay half the price, $7.5 million in cash to the selling shareholders - Brandix Group, Jacob BAC, Compagnie Mauricenne de Textile Ltee (CMT) and Pioneer Elastic Holdings. The other half will be paid through a share swap by issuing new Textured Jersey Lanka shares.

The TJL will issue 35.2 million ordinary voting shares by way of share swap to the shareholders at Rs. 28.50 a share. The stated capital of TJL at present is Rs. 2.85 billion.

Brandix, a "related party" of TJL, currently holds 29.81 per cent of TJL shares and it be paid $11.28 million, and raise its stake in TJL to 32.11 per cent with the share swap.

The TJL Board in in May this year has decided to acquire Quenby Lanka Prints (Pvt) Ltd, a fabric printer, for $3.5 million.

The TJL in a stock market disclosure said the acquisitions are pursuant to the company's on-going regional expansion and capacity enhancement strategy.

"The acquisition of Quenby Lanka and Ocean India should potentially launch TJL to the next level of solution provision and innovation while also catering to growing customer demand, thereby adding significant long-term value to its shareholders and reinforcing its foot print as one of the leading textile players in the South Asian region," the company said in a statement.

In addition to the capacity enhancement and optimization for TJL, these acquisitions also offer prospect of margin improvements through business and production synergies, TJL said. (SH)

Fibre2Fashion News Desk – India