KARACHI: A Chinese company has acquired 24.3% shares in Masood Textile Mills in a privately negotiated deal; members of the Karachi Stock Exchange (KSE) learned on Monday.
Shanghai Challenge Textile Company has bought 14.6 million shares of Masood Textile Mills, which constitutes roughly one-fourth of the total shareholding of the Faisalabad-based company.
The share of Masood Textile Mills hit the upper lock on Monday on the KSE. Its share closed at Rs128.15 after increasing by Rs6.10, or 5% of its opening rate.
Masood Textile Mills was in talks with another Chinese group – Shandong Ruyi Science and Technology Group along with Shahid Nazir Ahmad and Nazia Nazir – for the sale of its majority shareholding. It had received the approval from the Competition Commission of Pakistan (CCP) along with a separate approval from the Ministry of Commerce of China to go ahead with the acquisition. But the deal fell apart on September 30 when potential acquirers withdrew the public announcement of their intention to acquire up to 52% shares of Masood Textile Mills for undisclosed reasons.
It is the first-of-its-kind deal in Pakistan in which a Chinese group has acquired a majority stake in a local textile company. Besides the duty-free access to the European Union under the GSP Plus status, the Chinese investors will have the advantage of better cotton prices and cost-effective labour by investing in a Pakistani company.
Masood Textile Mills is a vertically-integrated textile manufacturing company with in-house yarn, knitting, fabric dyeing, processing, laundry and apparel manufacturing facilities. It posted a pre-tax profit of Rs1.1 billion in 2013, which was 13% higher than its pre-tax earnings in the preceding year. It produces value-added textile products, whose exports to the European Union (EU) are expected to increase due to the GSP Plus status that Pakistan has received.
Published in The Express Tribune, December 16th, 2014.
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Pakistan needs foreign investment to diversify it's mfg base ... not foreign investors buying up existing mfg - especially investors who are considered competitors in the textile business.
Extremely smart move by Masood Textiles.........looks like a win-win all around for them.
another national company being taken over by the chinese.. not only they have flooded our markets with cheap junk and closed thousands of small factories, making lakhs of poor laboreres and small scale workers out of job. And now they are slowly taking over few left over companies that we have.. does any one bother to notice? these chinese literally controls every thing in this country now, directly or indirectly... shameful
24.3% is not a majority stake !
"It is the first-of-its-kind deal in Pakistan in which a Chinese group has acquired a majority stake in a local textile company."