ACME Printing & Packaging mulls buying of JF Packaging

Tuesday, 5 July 2022 03:23 - - {{hitsCtrl.values.hits}}

ACME Printing & Packaging has entered into preliminary discussions with the board of the company’s parent company, Lankem Ceylon PLC(LCPLC) to negotiate the acquisition of a controlling stake of 51% or above of LCPLC’s Equity holding in its subsidiary J F Packaging Ltd., (JFP).

ACME said the proposal is very much in its infancy and no material decisions have been made in respect thereof as to whether or not the acquisition will proceed, including the terms thereof. Further, it said the potential transaction would also be dependent inter alia, on both parties agreeing to a valuation of the shares of J F Packaging Ltd. and obtaining the necessary regulatory as well as shareholder approvals (as may be required) to proceed with the transaction if the boards of directors of each company consider it viable to do so.

ACME said this discussion although is currently at its initial stages, is being disseminated to the market in accordance with the company’s obligations to do so in terms of the listing rules of the Colombo Stock Exchange, to provide the shareholders full disclosure of the affairs of the company when considering the rights issue (Rs. 556 million) which was approved by the shareholders at the extraordinary general meeting held on 23 June and currently pending closure.

Lankem Group owns 88.27% stake in ACME. Lankem’s cost of investment in JF Packaging is stated at Rs. 1.12 billion.

ACME Group revenue for the year ended on 31 March was Rs. 948 million, down by 33% from the previous year. It reported a loss from operations amounting to Rs. 161 million, as against a profit of Rs. 34 million. After tax loss was Rs. 309 million, up from Rs. 119 million. As at 31 March, accumulated losses amounted to Rs. 701 million at company level and Rs. 1 billion at group level.

In December ACME announced a 3 for 1 rights issue at Rs. 4.50 each in a bid to raise Rs. 555.68 million for the purpose of meeting working capital. Yesterday the share price of ACME closed at Rs. 6.30, up by 10 cents.