Pacific Textiles and Brandix Lanka joint venture seek listing on CSE

The Board of Directors of Textured Jersey Lanka (Private) Limited (Textured Jersey), a joint venture between Pacific Textiles Holdings Limited of Hong Kong (Pacific Textiles) and Sri Lanka’s Brandix Lanka Limited (Brandix Lanka), has decided to seek a listing on the Main Board of the Colombo Stock Exchange (CSE).

Textured Jersey is currently jointly owned by Pacific Textiles, which has a 60% stake in the company, and the balance 40% being held by Brandix Lanka. Post-listing, subject to receiving CSE approval, it is expected that approximately 30% of Textured Jersey will be held with the public, with part of the dilution taking place via a pre-IPO placement and the balance through an IPO of new shares. The total transaction value is estimated to be approximately Rs. 2.9 billion.

Textured Jersey is one of Sri Lanka’s most sophisticated production facilities, manufacturing knitted fabrics for the intimate apparel and sportswear industries. Specialising in the manufacture of high quality, weft-knitted and dyed stretch fabrics, Textured Jersey is a major supplier to apparel manufacturers throughout Asia and end-chain retailers.



Amongst its largest clients are Victoria’s Secret, Marks & Spencer and Intimissimi. Infrastructure at the 650,000 sq. ft. facility in Avissawella enables a capacity to knit, dye and finish up to 2.5 million metres of fabric a month. Despite facing challenges in the form of rising cotton prices, high energy costs and loss of tariff concessions, Textured Jersey has delivered strong financial results during the past five years.

Bill Lam, Chief Executive Officer of Pacific Textiles and a Director of Textured Jersey, also said that the listing would enable Textured Jersey to take advantage of potential growth opportunities in both Sri Lanka and the South Asian region. “High global cotton prices are an industry-wide headwind at present, but we believe this will facilitate industry consolidation in the longer term, and stronger players will continue to gain market share,” Lam added.

Ashroff Omar, Chief Executive Officer of Brandix Lanka and a Director of Textured Jersey, said that the listing was sought to provide Textured Jersey with greater operational flexibility and to provide a separate independent platform to raise funds from the capital markets to support its future growth aspirations. “Knit products constitute  the fastest growing segment of the Sri Lankan apparel export market, which is growing strongly even after the end of the GSP+ concessions in August 2010, and Textured Jersey is the country’s pre-eminent producer of value-added knitted fabric” said Omar.

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, with an annual production capacity of approximately 87 million kg. Pacific Textiles reported a 21% YoY increase in revenue for six months ended 30 September 2010 to HK$ 3.7 billion (US$ 474 million), with net profit attributable to shareholders rising by 17% YoY during the same period to HK$ 453 million (US$ 58 million).

Brandix has been accredited as Sri Lanka’s largest apparel exporter. Being the pioneer of 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, including Victoria’s Secret, PINK, Gap, Banana Republic, Marks & Spencer, Lands’ End, Tommy Hilfiger, Hanes, Express, H&M, Intimissimi and Tesco. The Group specialises in casual bottoms, underwear, lounge and sleepwear, bras, textiles, knitted and woven fabrics, sewing and embroidery thread, accessories and hangers, and also offers wet processing and finishing and fabric printing. The Brandix Group is supported by 32 manufacturing locations island-wide, in addition to other facilities in the South Asian region, and strategically located international sourcing offices, and directly employs over 30,000 associates in Sri Lanka.

Textured Jersey is being advised by investment bankers CT Capital (Pvt) Ltd. and Acuity Partners (Private) Limited, who will also act as managers to the capital raising and listing exercise.