Richardson Holdings to invest Rs. 96 m in ACME Printing
Tuesday, 4 November 2014 02:17
Richardson Holdings Ltd., is to invest Rs. 96 million in ACME Printing and Packaging Ltd.
This is following the company buying 8 million Rights of ACME last week.
ACME said by their letter Richardson has said it will subscribe to these rights which will result in an inflow of cash of approximately Rs. 96 million to the company.
Richardson purchase of Rights were among the quantity sold by ACME’s largest shareholder Colvis Company which divested its entirety of Rights amounting to 11 million shares at prices ranging between 30 cents and 70 cents each.
ACME also said that its Chairman and Director Dinal Peiris and connected parties have sold 0.85 million Rights on Thursday at an average price of 80 cents per Right.
Richardson, owned by a group of entrepreneurs and investors, specializes i outdoor marketing, infrastructure among others. It is believed the entry into ACME is strategic.
The shareholders of ACME Printing & Packaging PLC - the leading player in the domestic flexible packaging industry in Sri Lanka has approved the 1:1 Rights Issue of 25.6 million ordinary shares at a price of Rs. 12/- per share at its EGM held on 14th October 2014 in order to raise Rs.307 million as an equity capital infusion to the company.
The Rights Issue will close on the 5th of November 2014.
ACME Printing & Packaging PLC produces both aluminum foil and non-foil laminated packaging, and is one of few companies in the industry that can meet the quality and technical requirements of multinational and large scale local FMCG companies. It is also the sole manufacturer of aluminum foil in Sri Lanka with a market share of around 90% and is a globally accredited supplier to GSK which opens avenues to expand on its current pharmaceutical foil exports and is also the only manufacturer and supplier of aluminum foil to the fast growing local pharmaceutical industry.
“In addition to strengthening the financial position of the Company, the infusion of funds from the Rights Issue will reduce operating costs due to the reduction in scrap and wages. This will place the company in a sound footing to return to profitability” said Dinal Peiris, Chairman, ACME Printing & Packaging PLC.
“The proceeds of the Rights Issue are also earmarked to be utilised to upgrade key pieces of equipment with a view to increasing product quality, to reduce bank borrowings at high interest costs and to obtain additional working capital facilities to fulfill current orders” he added.
The Company is of the view that its workforce can be reduced significantly and hence discussions are in progress towards achieving this end. The restructuring combined with an easing of the working capital constraints currently experienced will allow the company to grow volumes in the medium term and increase market share.
Its fully owned subsidiary commenced commercial operation in February 2008 with the factory located at Pannala producing high quality flexible packaging materials with its state of the art 8-colour Roto Gravure printing machine and, undoubtedly, the best laminating machine, which was purchased a few months ago. This enables the Company to have a real competitive advantage, and is able to meet the high quality standards required by multinational buyers in the global market.
The Company has achieved the ISO certification since year 2000 and are an ISO: 9001-2000 and ISO 22000:2005 certified company.