The High Court has given the go-ahead for the two textile firms – CMC Kamal Textile Mills and Alif Unitex – to merge, continuing a trend in the industry to trim down administrative costs.
Under the amalgamation deal, a total of 76,050,000 ordinary shares of Tk10 each of CMC Kamal will be issued to the shareholders of Alif Unitex at an exchange ratio of 8.45 shares of the transferee company for each share of the transferor company.
CMC Kamal Textiles, a listed company in which Planning Minister AHM Mustafa Kamal once had a stake, said they received the High Court order on March 16 for merger of non-listed Alif Unitex with the company, according to a statement issued yesterday.
The merger will be effective subject to permission of regulators, particularly Bangladesh Securities and Exchange Commission.
In May 2015, the CMC Kamal decided to merge with Alif Unitex, a concern of business conglomerate Alif Group.
All the properties that include the title of land, building, other movable and immovable assets, tights, patents, interests, goodwill, licences, liabilities, obligations, claims etc. of every description of Alif Unitex will be transferred to and vested in the CMC Kamal as per procedures of the scheme of amalgamation, said the company.
Yesterday at the Dhaka Stock Exchange, share prices of CMC Kamal rose slightly 0.5% to Tk21.8 a share.
In 2014, the planning minister sold his entire holdings of 12,10,000 shares and his two daughters sold 19,25,400 shares of the company to Alif Textiles, one of the corporate directors of CMC Kamal.
Kashmiri Kamal, a director and wife of Mustafa Kamal, also sold her entire holdings of 36,01,300 shares to Md Azimul Islam who is the director of the CMC Kamal.
In 2010, CMC Kamal came into the discussion as its share price rose sixteen times on its face value despite suffering losses in business.
A stock market probe committee found that taking advantage of the market boom, Kamal and his family members sold shares worth around Tk20.50 crores in 2010.
The merger trend among listed firms has started since 2006 when Beximco Group had merged its four textile units into one, and in 2008, two other units of the group merged with Beximco, the group’s flagship company.
Later, Tripti Industries amalgamated with Olympic Industries.
In 2014, Keya Cosmetics merged with its three other associate companies – Keya Cotton Mills, Keya Spinning Mills and Keya Knit Composite.