Sri Lanka Hayleys ups stake in fabric unit

Sept 24, 2009 (LBO) – Sri Lanka’s Hayleys group said it has increased control of its fabric manufacturing unit, Hayleys-MGT Knitting Mills, after a mandatory offer to buy up shares of other shareholders. The firm said earlier that independent advice provided by Merchant Bank of Sri Lanka on the mandatory offer has found the price too low

Hayleys MGT, is the Hayleys Group’s cotton and synthetic fabric manufacturing business, with a production capacity of four million metres of fabric a month.

The company supplies top international brands such as Marks & Spencer, Next, Nike, Reebok and Decathlon. The company said in a stock exchange filing that acceptances received for its offer to buy all outstanding ordinary (voting) shares of Hayleys-Mgt Knitting Mills had raised its stake to 71.87 percent from 55 percent.

When the offer closed on September 23, it got a total of over 8.1 million shares or a 16.60 percent stake.

Hayleys spent 210 million rupees to increase control of Hayleys MGT Knitting Mills by buying 6.9 million shares (a 14.1 percent stake) held by National Development Bank in Hayleys MGT Knitting Mills on July 30, 2009.

The acquisition, for which Hayleys paid 30.25 rupees