Texhong Textile Group Limited, China's leading upstream high value-added core-spun cotton textile manufacturer, announced the acquisition of Yizheng Chemical Fiber Changzhou Daming Company at a consideration of RMB98,577,901 (equivalent to approx. HK$94,786,442) to bolster its yarn and fabric production capacity by approx. 16.8% and 14.4% respectively.
Yizheng Daming is a state-owned enterprise located in Chanzhou, Jiangsu Province, the PRC, owned as to 80% by Yihua Group Company and 20% by Changzhou Municipal People's Government. It is principally engaged in the manufacturing and sale of yarn, garment and bedroom products and has a total production capacity of approx. 67,000 spindles and 104 air-jet looms.
Upon completion of the acquisition, Texhong's production capacity will be increased to 467,000 spindles and 826 air-jet looms, which will further enhance its economies of scale and increase its operating efficiencies.
Commenting on the acquisition, Hong Tianzhu, Chairman of Texhong said, "We have accumulated a wealth of successful experience in acquisitions of state-owned enterprises and expanded rapidly in the past years. The acquisition of Yizheng Daming represents a good opportunity for the Group to increase its production capacity in a cost effective manner. We are confident that we can fully utilize the existing production facilities of Yizheng Daming to create synergy within the Group and to generate profits in the near future."
The total consideration of RMB 98,577,901 included RMB1 for the transfer of entire equity interest in Yizheng Daming and the procurement of the repayment of a Debt that amounts to RMB98,577,900. The Group will settle the consideration by installments within one year upon completion which will be funded by internal resources.
Texhong Textile Group Limited is one of the largest high value-added core- spun cotton textile manufacturers in the PRC and is a leading textile enterprise focusing on manufacturing high value-added core-spun cotton textile products.
The Group is principally engaged in the manufacture and distribution of quality yarn, grey fabrics and garment fabrics, especially high value-added spandex stretch yarn and fabrics. It is currently operating 10 highly efficient manufacturing bases in Jiangsu and Zhejiang Provinces. It has over 1,200 PRC and overseas customers, of which its sales network spans across the PRC, Europe, North America, Bangladesh, Hong Kong and South Korea.
