Home ›› 09 Sep 2021 ›› Stock
Alif Group has expressed its keen interest to acquire the entire C&A Textiles Limited, a listed company which has been out of production for the last five years.
The business conglomerate, which is mainly engaged in textile spinning, dyeing, and knitting, has already visited the C&A Textiles and submitted its presentation regarding the acquisition plan to Bangladesh Securities and Exchange Commission (BSEC).
In this regard, a meeting was held between the Alif Group and the stock market regulator on Wednesday, in participation of Md Azimul Islam, managing director of Alif Group, and BSEC senior officials.
The Alif Group handed over its official proposal to the BSEC as the regulator’s nod is a must for acquisition of the listed companies.
In its proposal, the Alif Group said, “We have conducted our due diligence of C &A Textiles from the operational perspective. We have also given our presentation earlier to the Commission regarding our plan with this company”.
It categorically stated, “We understand that C & A Textiles had undergone major difficulties in operational, financial and regulatory level”.
It also added, “The current production, sales, and profit are not sufficient enough to service its existing debt and shareholders. Moreover, the company has a substantial amount of both interest and non-interest-bearing liabilities, which cannot be serviced with its present operation.”
The senior officials of the companies could not be reached for comment despite repeated attempt.
In 2015, the C&A Textiles was listed on the bourses. After that, the Chattogram based company was in operation from 2014 to 2016 and declared stock dividends 11 per cent, 12 per cent, 10 per cent for the years respectively.
After 2016, the company had faced some problems relating to operation, which forced it to shut production.
As the company has been shut for the last five years, some of the machinery are now out of order, while some require major repair.
In the acquisition proposal, the Alif Group said, “We have been doing business successfully in similar industries for more than 37 years. Though it is very difficult to fix the present condition of C&A Textiles, we believe that with our expertise, industry knowledge, we should try to revive the condition of C&A Textiles for the greater interest of all stakeholders as well as the country.”
“Therefore, based on our due diligence of the operation level, we intend to acquire the company subject to the consent and kind assistance of BSEC and the existing board of directors of C&A Textiles,” the group added.
Shares of C&A Textiles are traded under the ‘Z’ category in the Dhaka bourse. The company's share price was Tk 6.90 on Wednesday.
Earlier in March, the BSEC had restructured the board of C&A Textiles in its effort to protect the interest of general shareholders. Narayan Chandra Debnath, an additional secretary, has been serving as the chairman of the directors’ board of C & A Textiles.
Recently, the sponsors and directors of C&A Textiles disposed of their holdings at a high price -- and the MD sold all her shares -- ignoring the regulatory requirement of holding 30 per cent shares at all times.
Now, the joint holding of shares by sponsors and directors is less than 22.14 per cent of paid-up capital.
The Managing Director of C & A Textiles, Rukshana Morshed was arrested in Chattogram in a case filed over a defaulted loan in November last year.
