Richardson exits ACME; E.B. Creasy enters

• Sells 19.4% stake or 8 m shares for Rs. 96 m; deal triggers interest with 18 m shares traded for Rs. 215 m forcing share to close up 21% to Rs. 12.20

Second largest shareholder Richardson Holdings Ltd. yesterday exited ACME Printing and Packaging PLC, selling its stake to E.B. Creasy and Co. PLC for Rs. 96 million.

Richardson held 19.43% stake or 8 million shares and sold the stake at Rs. 12 each.

Net assets per share of loss-making ACME is Rs. 11.47 as at 30 June. Accumulated loss at company level was Rs. 472 million and at Group level it was Rs. 915 million.

Colvis Company Ltd. owns a 27% stake.

Post-transaction of strategic stake, ACME saw heightened interest. 18 million shares changed hands via 540 trades for Rs. 215.4 million. The share price closed at Rs. 12.20, up by 21% or Rs. 2.10.

The exit of Richardson comes a day after ACME Chairman J.M. Swaminathan in a proactive disclosure to the CSE updated the company›s challenges and plans to look for capital infusion.

Swaminathan said multiple external factors were making it difficult for the company to operate profitably, as they called for an infusion of funds.

In its filing to the CSE, the Chairman said ACME has a high level of interest-bearing debt as reflected in the financial statements for 30 June.

“Increasing raw material prices, the difficulty in importing raw materials and the constraints on working capital are making it difficult for the company to operate profitably without an injection of funds,” Swaminathan said.

“The company is currently looking for investments into the company and/or its fully-owned subsidiary, Acme Packaging Solutions Ltd., as well as exploring other options such as to dispose/sell assets to raise money for working capital and reduction of debt.”

Though ACME saw 19% growth in Group revenue to Rs. 337.9 million in 1Q of FY22, cost of sales rose by 23%, leading to gross profit of Rs. 3.6 million, down by 66% from a year earlier. Loss from operations rose by 182% to Rs. 37.7 million and loss before taxation was Rs. 70 million, as against a Rs. 48 million loss in 1QFY21. Accumulated loss at ACME stood at Rs. 915.4 million as of 30 June. It had non-current liabilities of Rs. 83.4 million and current liabilities were Rs. 1.26 billion.

In FT21, Group revenue increased by 18% and the gross profit margin improved from 5.8% to 8.7%. However, the Group reported a loss of Rs. 100.6 million before tax and a loss of Rs. 97.9 million in the company compared to Rs. 183 million loss and Rs. 100 million loss respectively in the preceding year.