Alif Industries, a listed company, has signed an agreement to acquire Royal Denim Limited, a 100% exporting unlisted company.

The acquisition is expected to increase the company’s annual revenue by Tk 216 crore and profit by Tk 20 crore, the company said.

Alif Industries reported a turnover of around Tk 85 crore and a profit of Tk 10.44 crore for the financial year 2023-24.

According to information published yesterday on stock exchange websites, Royal Denim produces 100% denim fabrics for export with a current capacity of 750,000 meters per month, located in the Cumilla Export Processing Zone.

Alif Industries in the disclosure states that the mode of financing will be own and bank financing. Until the buyout is finalized, Alif Industries will lead the business operations and marketing of the company, adopt the business strategy and bear and attend to all necessary monthly overheads and payment of outstanding dues, if necessary, says disclosure.

Azimul Islam, managing director of Alif Industries, told the Business Standard: “We will take over the company, which will strengthen the financial base of Alif Industries.”

10% cash and 10% stock dividend recommended

The textile company has recommended a 10% cash dividend only for its general shareholders and a 10% stock dividend for all shareholders for FY24.

This means that sponsoring directors will not receive cash dividends and general shareholders will receive both cash and stock dividends.

In FY23, it had paid a 17% cash dividend to its shareholders.

Its share price jumped 10.77% to Tk79.20 apiece on the Dhaka Stock Exchange (DSE) yesterday.

Azimul Islam also said, “With the dividend recommendation, the company’s payout ratio will be above 90%. More or less, the company’s dividend payout ratio was around 80-90%.

Alif Manufacturing merger to proceed

Alif Manufacturing Company Ltd, another textile company listed on the Dhaka and Chittagong stock exchanges, is managed by common management under the Alif Group.

One year ago, on September 25, 2023, the owners decided to merge Alif Industries with Alif Manufacturing.

Additionally, Alif Industries also decided on July 23, 2023 to merge C&A Textile, another listed company, which remained closed for years and resumed operations under the Alif Group.

Now, Alif Industries has informed that the execution of the merger of Alif Manufacturing with Alif Industries will continue as previously announced.

However, the completion of the merger of Alif Industries and C&A Textiles will remain suspended.

The Bangladesh Security and Exchange Commission (BSEC), under the leadership of the new Chairman and Commissioners, has canceled the raising of Tk 300 crore issue bonds and the issuance of Tk 200 crore of new shares to the owners of Alif Industries.

Today, Alif Industries submitted a review application to the commission to reinstate the issuance of bonds and the raising of capital through the issuance of shares.

The company said its fundraising was an integral part of the revival of C&A Textiles in line with the Alif Group proposal approved by the BSEC on October 7, 2021.

If raising capital through the issuance of bonds and shares is not permitted, the fate of C&A Textile will hang in the balance, company officials said.