Textured Jersey Lanka Limited (Company), a joint venture between Pacific Textured Jersey Holdings Limited, a fully owned subsidiary of the Hong Kong listed Pacific Textiles Holdings Limited (Pacific Textiles), and Sri Lanka's Brandix Lanka Limited (Brandix Lanka), has been granted approval by the Colombo Stock Exchange (CSE) for a listing on its Main Board. The subscription list for the IPO will open on 7th July 2011 and applications will be accepted from 27th June 2011.
Textured Jersey Lanka Limited, the country's pre-eminent producer of value-added knitted fabric, which specializes in the manufacture of high quality, weft-knitted and dyed stretch fabrics, is a major supplier to apparel manufacturers throughout Asia and end-chain retailers such as Marks & Spencer, Victoria's Secret and Intimissimi. The Company is issuing a 12.21% stake or 80,000,000 new ordinary voting shares at a price of Rs. 15/- per share, to raise funds for the expansion of production facilities and to purchase state-of-the-art machinery to increase its production scale and efficiency.
Both Pacific Textiles and Brandix Lanka completed a placement of a total of 116,000,000 shares, which amounts to 17.71% of the Company (post- IPO) to certain qualified investors before the IPO as a private sell down in May 2011. The consideration for the pre-IPO placement was Rs. 15/- per share, which is the same price as the IPO share price. Subsequent to the IPO, Pacific Textiles, through its wholly owned subsidiary Pacific Textured Jersey Holdings Limited, and Brandix Lanka, will collectively hold 70.08% of the total issued shares of the Company.
With the backing of two strong shareholders, the listing would enable the Company to take advantage of potential growth opportunities in both Sri Lanka and the South Asian region, and also provide a separate independent platform to raise funds from capital markets to support its future growth aspirations. The Company remains confident in mitigating the challenge posed by the recent volatility in cotton prices, given its ability to pass on these industry generic costs, and with commodity prices also having recently declined.
For the year ended 31st March 2011, the Company recorded a revenue of USD 83.2mn (LKR 9,284.6mn) and a net profit after tax of USD 6.1mn (LKR 684.7mn) which represented 15% and 23% YoY growth respectively. The Company has a strong financial track record, with five year revenue and net profit CAGRs of 25% and 21% respectively, during a period of multiple challenges for the apparel industry.
Textured Jersey is being advised by investment bankers Acuity Partners (Private) Limited and CT Capital (Pvt) Ltd., who are also the joint managers to the issue.
The Hong Kong listed Pacific Textiles is a leading manufacturer of customized 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.
Brandix has been accredited as Sri Lanka's single largest apparel exporter. Having pioneered 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.