Shasha Denims Limited (SDL) will acquire 40 per cent stake of EOS Textiles Mills Limited.
The shares are valued at approximately Tk 480 million.
"The process of acquisition of EOS Textiles Mills is almost done," Aslam Ahmed Khan, company secretary of the Shasha Denims told the FE on Thursday.
Mr Khan said out of Tk 480 million, Tk 300 million will come from initial public offering (IPO) fund, as approved by shareholders in the 20th annual general meeting (AGM) held in November last year.
Remaining Tk 180 million will come from company's cash flow to acquire 40 per cent shares of EOS Textiles Mills, he said.
EOS Textiles Mills is a 100 per cent export-oriented textile company established on 8th June, 1998 by Italian investors.
Recently, the company has signed a memorandum of understanding (MoU) with EOS Textile Ltd in this regard.
Shasha Denims, a sister concern of Shasha Group, one of the leading denim producers in Bangladesh, raised Tk 1.75 billion through IPO in 2014 for a major expansion and improve the quality of denim fabrics by installing modern machinery with the IPO funds.
The company floated 50 million ordinary shares at an offer price of Tk 35, including a premium of Tk 25 for each Tk 10 share and raise the said amount.
"The company has already spent its maximum amount of IPO fund for purchasing and installing the required machinery," said Mr Khan.
He noted that most of the machinery is already installed and some would be set up shortly.
After completion of the project, revenue of the company will be increased accordingly in the coming years, he said.
"For the factory extension, new and essential machinery including indigo machine have also been installed in the existing factory for raising production that saves 60 per cent water and 40 per cent chemicals in process in comparison to any other conventional dyeing machinery," said Shams Mahmud, managing director of Shasha Denims, in its latest annual report.
"We hope to make a remarkable growth and profit once the extension project is successfully done," said Mr Mahmud.
The company earned a total gross revenue of Tk 4.33 billion as export income in 2016-2017, against Tk 4.41 billion in 2015-2016, registering a 1.77 per cent decline compared to last year.
"The total revenue fell slightly due to overall export decline in the last quarter of the financial year (FY) 2016-17" according to the company's annual report.
"The company couldn't add any income from new capital injection during the year as full expansion is yet to be completed," the annual report said.
The company's total assets stands at Tk 7.11 billion as on June 30, 2017 from Tk 6.67 billion as on June 30, 2016, showing a 15 per cent growth year-on-year.
The Shasha Denims has reported consolidated earnings per share (EPS) of Tk 1.25 for January-March, 2018 quarter as against Tk 1.09 for same quarter in the previous year.
In nine months for July 2017-March 2018, its consolidated EPS was Tk 3.65 as against Tk 3.57 for July 2016-March 2017.
The consolidated net operating cash flow per share (NOCFPS) was Tk 2.26 for July 2017-March 2018 as against Tk 1.37 for July 2016-March 2017.
The consolidated net asset value (NAV) per share was Tk 47.24 as on March 31, 2018 and Tk 44.66 as on June 30, 2017.
Each share of Shasha Denim, which was listed on the Dhaka bourse in 2015, closed at Tk 61.60 on Thursday on the Dhaka bourse, advancing 1.82 per cent over the previous session.
In 2017, the Shasha Denims disbursed 25 per cent cash and 6.0 per cent stock dividend.
The company's paid-up capital is more than Tk 1.19 billion and authorised capital is Tk 2.25 billion, while the total number of securities is 119.55 million.
