Alif Industries has entered into a deal to acquire Royal Denim

Alif Industries, a listed company, has signed a deal to acquire Royal Denim Limited, a 100% export-oriented unlisted company.

The company projects that the acquisition will add Rs 216 crore to its annual revenue and profit by Rs 20 crore.

For the financial year 2023-24, Alif Industries generated revenue of around Tk 85 crore and profit of Tk 10.44 crore.

Royal Denim is a 100% export-oriented denim manufacturer with a current capacity of 750,000 yards per month located in the Cumilla Export Processing Zone, according to a statement posted on stock exchange websites yesterday.

Alif Industries’ disclosure states that the funding will be through equity and bank financing. Until the completion of the acquisition, Alif Industries will manage the business operations and marketing of the company, adopt the business strategy, and take care of and monitor all necessary monthly overheads and payment of outstanding dues, if required, the disclosure said.

Azimul Islam, managing director of Alif Industries, told Business Standard: “We will take over the management of the firm, which will strengthen the financial base of Alif Industries.”

A dividend payout of 10% cash and 10% stock is recommended.

The textile firm has recommended paying 10% cash dividend to its general shareholders only and 10% share dividend to all shareholders for FY24.

This means that sponsoring directors will not receive cash dividends, but general shareholders will receive both cash and stock dividends.

In FY23, the company paid a cash dividend of 17% to shareholders.

Its share price jumped 10.77 per cent to Tk 79.20 apiece on the Dhaka Stock Exchange (DSE) yesterday.

Azimul Islam also said, “With the dividend recommendation, the company’s payout ratio will be more than 90%. More or less, the company’s dividend payout ratio was around 80-90%.”

Alif Manufacturing merger will continue

Alif Manufacturing Company Ltd, another textile company listed on the Dhaka and Chittagong stock exchanges, is under the overall management of the Alif Group.

A year ago, on September 25, 2023, the owners decided to merge Alif Industries with Alif Manufacturing.

Not only this, Alif Industries also decided on July 23, 2023 to merge C&A Textile, another listed firm that remained closed for many years and resumed operations under the Alif Group.

Alif Industries has now announced that the process of merging Alif Manufacturing with Alif Industries will continue as announced earlier.

However, the merger process between Alif Industries and C&A Textiles will be suspended.

The Bangladesh Securities and Exchange Commission (BSEC), under the leadership of its new chairman and commissioners, has canceled the issue of bonds worth Rs 300 crore and the issue of new shares worth Rs 200 crore to the owners of Alif Industries.

Alif Industries has now filed an application with the commission to resume issuing bonds and raise capital through issuance of shares.

The company said that the fundraising is an integral part of the revival of C&A Textiles in accordance with the Alif Group proposal approved by the BSEC on October 7, 2021.

Unless capital raising through bond and equity issues is allowed, the fate of C&A Textile will hang in the balance, company officials said.