Textured Jersey Rs. 1.2 b IPO up for grabs from next week

Textured Jersey Lanka Ltd.’s Rs. 1.2 billion worth Initial Public Offering (IPO) will be available for subscription from next week.

This follows the Colombo Stock Exchange (CSE) approving in principle an application for main board listing of voting shares of Textured Jersey.

The IPO will make available 80 million ordinary voting shares at Rs. 15 each, to raise funds for the expansion of production facilities and to purchase state-of-the-art machinery to increase its production scale and efficiency.  

It will be up for subscription from 27 June whilst the official opening date is 7 July.

Joint managers to the offer are Acuity Partners and CT Capital whilst registrars to the issue is SSP Corporate Services.

Textured Jersey Lanka, a joint venture between Pacific Textured Jersey Holdings Limited, a fully owned subsidiary of the Hong Kong listed Pacific Textiles Holdings Limited, and Sri Lanka’s Brandix Lanka Limited, is the country’s pre-eminent producer of value-added knitted fabric, which specialiszes in the manufacture of high quality, weft-knitted and dyed stretch fabrics.

Both Pacific Textiles and Brandix Lanka completed a placement of a total of 116,000,000 shares, which amounts to 17.71% of the company (post-IPO) to certain qualified investors before the IPO as a private sell down in May 2011.

The consideration for the pre-IPO placement was Rs. 15 per share, which is the same price as the IPO share price. Subsequent to the IPO, Pacific Textiles, through its wholly owned subsidiary Pacific Textured Jersey Holdings Limited, and Brandix Lanka, will collectively hold 70.08% of the total issued shares of the company.  

With the backing of two strong shareholders, the listing would enable the company to take advantage of potential growth opportunities in both Sri Lanka and the South Asian region, and also provide a separate independent platform to raise funds from capital markets to support its future growth aspirations. The company remains confident in mitigating the challenge posed by the recent volatility in cotton prices, given its ability to pass on these industry generic costs, and with commodity prices also having recently declined.

For the year ended 31 March 2011, the company recorded revenue of US$ 83.2 m (Rs. 9,284.6 m) and a net profit after tax of US$ 6.1 m (Rs. 684.7 m), which represented 15% and 23% YoY growth respectively. The company has a strong financial track record, with five year revenue and net profit CAGRs of 25% and 21% respectively, during a period of multiple challenges for the apparel industry.

The Hong Kong listed Pacific Textiles is a leading manufacturer of customised knitted fabric in the global textile industry, with a focus on complex, value-added fabrics. It has one of the largest textile manufacturing facilities in China, and provides integrated services of knitting, dyeing, printing and finishing.

Brandix has been accredited as Sri Lanka’s single largest apparel exporter. Having pioneered the concept of ‘total solutions’ in Sri Lanka’s apparel sector, Brandix is a preferred solutions provider to some of the world’s leading apparel brands.