• Thu. May 6th, 2021

Dhamike Perera-controlled, Hayleys Fabric PLC (MGT) entered into an agreement with Ambeon Holdings PLC (GREG) yesterday (22nd April) to acquire the fourth largest fabric manufacturer in Sri Lanka South Asia Textiles (SAT), to become the largest fabric manufacturer in the country.

South Asia Textiles is a BOI certified company operating in Sri Lanka since 2004 and is specialized in producing weft knitted fabric for leading global brands such as L-Brands Victoria Secret PINK, Next, NIKE, Marks & Spencer, Tesco,
PVH/Calvin Klein, Columbia Sportswear, Lidl, ASICS, George, Tommy Hilfiger, LEVI’s, Helly Hansen, Hanes, Hugo Boss, Decathlon, and Adidas, according to First Capital Research (FCR).

The SAT has the capacity to produce 800MT of fabrics per month.

“The company was acquired by GREG in 2011/12. The manufacturing facility of SAT is located in Pugoda, across 73 acres of land, which is under a 50-year lease agreement with the BOI, out of which 33 years still remain,” FCR noted.

For the 1Q-3QFY21, SAT has made a loss of Rs 417 million compared to a profit of Rs191Mn in 1Q-3QFY20.

FCR estimated the acquisition to be funded either of three methods: Funding through a share swap agreement with Ambeon Holdings PLC, Funding through a combination of debt and equity or funding the total amount through debt.

It stated that the last option would affect the profitability through increased finance costs.

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