IPO money to partly finance purchase of a fabric mill within south Asia soon
Sri Lanka’s leading producer of value-added knitted fabric, Textured Jersey Lanka Plc (TJL) said last week that it intends to soon use part of its proceeds raised through its Initial Public Offering (IPO) last year towards the purchase of an operating fabric mill located within South Asia for which negotiations are in progress. According to a disclosure filed with the Colombo Stock Exchange, the apparel exporting firm said that given the changes in the global and local macro-economic environment, immediately after the listing in July 2011, the firm’s Board of Directors had decided to hold back the proposed organic expansion within the Avissawella BOI Zone.
“After evaluating different options, the Board feels that TJL’s expansion should be by way of acquiring an operating fabric mill within the South Asian subcontinent. Evaluations with regard to these acquisitions are currently ongoing. However a timeline has not been decided yet,” the firm said adding that this will provide the company the access to an operating fabric mill and the results would be faster than investing in an internal expansion.
Meanwhile, the CSE filing also revealed that TJL had invested a small portion of the funds raised through the IPO in addressing bottlenecks within the production facility which has assisted in increasing capacity as well as improving efficiency. However, the filing did not specify as to how much money was spent or is needed to acquire the proposed fabric mill in future. The disclosure further noted that the recent fuel price hike which resulted in a Rs.40 increase in the price of furnace oil has adversely impacted the energy cost of TJL. “In this respect, the Board is evaluating options on an alternative energy source, including but not limited to coal and bio-mass, which will require an investment by the company into the relevant technology. Such investment will enable the company to enjoy substantial savings to its future energy cost,” the disclosure further added.
Sri Lanka’s leading producer of value-added knitted fabric, Textured Jersey Lanka Plc (TJL) said last week that it intends to soon use part of its proceeds raised through its Initial Public Offering (IPO) last year towards the purchase of an operating fabric mill located within South Asia for which negotiations are in progress. According to a disclosure filed with the Colombo Stock Exchange, the apparel exporting firm said that given the changes in the global and local macro-economic environment, immediately after the listing in July 2011, the firm’s Board of Directors had decided to hold back the proposed organic expansion within the Avissawella BOI Zone.
“After evaluating different options, the Board feels that TJL’s expansion should be by way of acquiring an operating fabric mill within the South Asian subcontinent. Evaluations with regard to these acquisitions are currently ongoing. However a timeline has not been decided yet,” the firm said adding that this will provide the company the access to an operating fabric mill and the results would be faster than investing in an internal expansion.
Meanwhile, the CSE filing also revealed that TJL had invested a small portion of the funds raised through the IPO in addressing bottlenecks within the production facility which has assisted in increasing capacity as well as improving efficiency. However, the filing did not specify as to how much money was spent or is needed to acquire the proposed fabric mill in future. The disclosure further noted that the recent fuel price hike which resulted in a Rs.40 increase in the price of furnace oil has adversely impacted the energy cost of TJL. “In this respect, the Board is evaluating options on an alternative energy source, including but not limited to coal and bio-mass, which will require an investment by the company into the relevant technology. Such investment will enable the company to enjoy substantial savings to its future energy cost,” the disclosure further added.
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