Ever Shine to acquire two other companies
Ever Shine to acquire two other companies
JAKARTA (JP): Independent shareholders in publicly-listed synthetic fabric manufacturer PT Ever Shine Textile Industry gave their approval yesterday to the company's plan to acquire two other textiles firms at a cost of Rp 12 billion (US$5.22 million).
A director of Ever Shine, Erlin Lindawati Surianto, said that the acquisition will be financed with the company's time deposits and will be paid for within three months of the date of approval.
The two firms to be acquired are PT Prima Rajuli Sukses, a manufacturer of nylon fabric, and PT Mingtak Niaga Jaya, a producer of polyester fabric.
Erlin acknowledged that the acquisition contains a conflict of interest because three executives of the company, namely Sung Pui Man, Sung Man Tak and Emmy Ranoewidjojo, are executives of the target companies.
Moreover, the three are the owners of PT Mingtak Niaga. Furthermore, together with the owner of PT Prima Rajuli, Chiang Li Ching, they are members of the Sung Family, which indirectly owns and controls both companies. It was for these reasons that the approval of the independent shareholders was required.
Prima Rajuli, which is 100 percent-owned by Chiang Li Ching, has an authorized capital of Rp 8 billion, including a paid-up capital of Rp 5 billion.
Mingtak Niaga Jaya is 50 percent-owned by Sung Pui Man, 40 percent by Sung Man Tak and 10 percent by Emmy Ranoewidjojo. It has an authorized capital of Rp 10 billion, of which Rp 7 billion is paid up.
Erlin told The Jakarta Post that 57 percent of the independent shareholders approved the acquisition plan at yesterday's extraordinary meeting here.
She said that the independent shareholders represent 50.1 million shares of the company's total outstanding 126.5 million shares.
"Although the approval seems to be marginal, it satisfies the regulation which requires approval from at least 51 percent of independent shareholders," said Erlin.
Erlin said that the acquisition would allow the company to expand its operations, increasing economies of scale in production and marketing, and would strengthen its integration as a textile company.
The acquisition is not the first for the company. In September 1994, Ever Shine acquired 100 percent of the shares of PT Indo Yongtex Jaya, also a textile firm, after raising Rp 63 billion from a rights issue.
Indo Yongtex Jaya has a production capacity of three million yards of acetate fabric, 350,000 kilograms of texturized and twisted yarn and 300,000 garments per annum.
Ever Shine's annual production capacity is currently 60 million yards of woven fabric, 1,980 tons of knitted fabric and 1.5 million garments.
During the first nine months of this year, the company posted net sales of Rp 117.27 billion and gained a profit of Rp 19.08 billion, as compared with Rp 92 billion and Rp 15.56 billion in the same period of last year. (08)