Investors have approved the board of directors’ proposal for the merger of FAR Chemical Industries with SF Textile Industries for business expansion. Earlier, the Honorable High Court Division of the Supreme Court of Bangladesh approved the proposal to merge the company on November 11.
The board of directors of the company thinks that the merger of SF Textiles with FAR Chemical will increase the business of FAR Chemical at a significant rate.
In November last year, The FAR Chemical Industries Limited announced that it was going to acquire SF Textiles – an unlisted export-oriented yarn spinning company – along with all the assets and liabilities of the latter.
The production unit of SF Textile Industries is located at FAR Chemical’s own land at Rupganj, Narayanganj. SF Textiles has been manufacturing since 2016 and has a production capacity of 42250 units of cotton, viscose and CVC yarn.
SF Textiles has authorized capital of TK 201 crore and paid up capital of TK 157 crore. In the last financial year 2021, the EPS of the company was TK 1.31. The company’s asset value per share (NAV) stood at TK 15.22 at the time of discussion.
On the other hand, FAR Chemical was listed on the stock market in 2014. The authorized capital of the company is TK 300 crore and paid up capital is TK 218 crore. The company posted a loss of 16 paisa per share in the last financial year 2021. The company’s asset value per share (NAV) at the time of discussion was TK 12.04.
Regarding the expansion project, Humayun Kabir, Marketing Director of the company said, FAR Group has been doing garment and export business since 1991 with reputation. Braving the recent global recession, the group has invested around TK 300 crore in new expansion units.
Company Secretary ABM Golam Mostafa said that the spinning unit of the company located in Rupganj, Narayanganj has successfully started full-scale production from November 15 after the experimental production.
This new investment is likely to add massive growth to the company’s EPS. On the other hand, if merge with SF Textiles, it will have the opportunity to produce on its own land. As a result, there will be huge cost savings on rent. Apart from this, modern machineries and skilled manpower of SF Textiles will also be utilized.
FAR Chemical Board expects the company to return to ‘A’ category with good dividend payout soon after the merger process with SF Textiles.
