Textured Jersey’s Rs. 1.74 b worth 20% pre-IPO private placement oversubscribed by 2.5 times

There had been big demand with an estimated 2.5 times oversubscription for Textured Jersey’s Rs.1.74 billion worth private placement offering 20% stake prior to the Initial Public Offering (IPO).

The placement was at Rs. 15 per share, at which price the planned IPO by the Company offering 10% stake will also be launched.

The Company in a statement said the private placement to divest 20% stake by its existing shareholders to qualified investors was comfortably oversubscribed despite it being offered to selected investors with a minimum subscription threshold of over Rs. 50 million.

Textured Jersey Lanka Ltd., a joint venture between Hong Kong listed Pacific Textiles Holdings Limited and Sri Lanka’s Brandix Lanka Ltd., expects to shortly submit its IPO listing application to the CSE, wherein a further 10% stake will be divested.

IPO aimed at the broader investing public will be by way of a fresh issue of shares at the same pre-IPO placement price, subject to receiving CSE approval for same. This new issue is expected to raise Rs. 1.2 billion, with approximately 30% of Textured Jersey to be in the hands of the public post-listing on the CSE.

Bill Lam, Chief Executive Officer of Pacific Textiles Holdings and Director of Textured Jersey Lanka, 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 is an industry-wide headwind at present, but we believe this will facilitate industry consolidation in the longer term as stronger players continue to gain market share,” Lam said. Cotton plantings acreage would also increase in response to the higher prices, he stated.

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, with net profits rising at a CAGR of 22% to US$ 5.0 million in the year ended 31 March 2010.  

Chief Executive Officer of Brandix and Director of Textured Jersey Ashroff Omar said that the company was both honoured and humbled by the confidence and trust placed by investors in Textured Jersey and emphasised that the listing would provide Textured Jersey with greater operational flexibility and a separate independent platform to raise funds from the capital markets to support its future growth aspirations.



“Knitted fabric is 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,” stated 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. PTH reported a 21% YoY increase in revenue for six months ended 30 September 2010 to HK$ 3.7 billion, with net profit attributable to shareholders rising by 17% YoY during the same period to HK$ 453 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 Lanka is being advised by investment bankers CT Capital (Pvt) Ltd. and Acuity Partners (Private) Limited, who are also acting as managers to the capital raising and listing exercise.