Textured Jersey eyes takeover of knit fabric manufacturer in India
Friday, 13 February 2015 00:00
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Textured Jersey Lanka Plc, in which apparel giant Brandix owns 30%, is exploring prospects to acquire an Indian knit fabric manufacturer based in Visakhapatnam. In a filing to the Colombo Stock Exchange, Textured Jersey Lanka Plc (TJL) said it has decided to initiate an independent valuation and due diligence study for the purpose of looking at the feasibility of acquiring controlling stakes in Ocean India Ltd. and Quenby Lanka Prints Ltd.
This is in pursuance of TJL’s ongoing regional expansion and capability enhancement strategy. The decision to proceed with the acquisitions will be subject to findings of the study and ensuing negotiatioins between all parties concerned.
Brandix Lanka also has equity stakes in both Ocean India and Quenby Lanka. In this context TJL said, a board sub committee consisting of TJL Chairman Bill Lam, two independent directors Amitha Gooneratne and Prof. Malik Ranasinghe and Managing Director Sriyan de Silva Wijeyeratne, have been appointed to overseas the progress of the transaction.
The independent valuation will be conducted by Ernst & Young. Upon the conclusion of the study, if an agreement between all parties is successfully reached, further details including consideration and payment method will be disclosed to the market, the TJL filing to CSE said.
It also said completion of the transaction is also subject to approvals from the Board of Investment and shareholders of TJL.
Currently TJL has a technical services agreement with Ocean India that has allowed TJL’s management to familiarise itself with the operations of Ocean India since October 2013.
Quenby Lanka is a leading fabric printer based in Sri Lanka and is currently a strategic vendor to TJL and is located in Seethwaka Industrial Park in close proximity to TJL production facility. It has also developed a strong working relationship with TJL.
“Provided the decision is made to proceed with the two acquisitions the strong working relationship already established should help speed up the business integration process and potentially launch TJL to the next level of solution provision, innovation and regional growth thereby adding significant long-term value to its shareholders and reinforcing its leadership within the fabric industry,” TJL filing to the CSE added.
