Malek Spinning’s subsidiary to invest Tk 1.58b for expansion

JM Fabrics Limited (JMFL), a subsidiary (99.99 per cent) of publicly traded Malek Spinning Mills, has approved to invest nearly Tk 1.58 billion for business expansion.

In a stock exchange filing on Tuesday, Malek Spinning said the board of JM Fabrics had approved a BMRE plan for setting up seamless facilities and yarn texturizing and covering facilities and other facilities.

The proposed BMRE (Balancing, Modernization, Rehabilitation and Expansion) will be implemented by funds from internal sources of JM Fabrics as well as bank loans. Malek Spinning Mills will not be required to provide any funds in this regard.

After setting up the seamless facilities and establishment of other facilities, production capacity will increase from equivalent to 52.94 million to 54.93 million pieces per year, the company said.

This BMRE will create value addition due to the improvement of product quality, enabling the company to sell its products at higher prices and retain better margins, said the company.

The board has also given the authority to execute the proposal of rental agreement of 52,000 sft unutilized area of scrap godown at the factory premises at Shafipur, Kaliakoir, Gazipur at Tk 15 per sft. per month with JM Fabrics at a fair market price negotiable from time to time.

The board of Malek Spinning and JM Fabrics has given guarantees to the above transaction as per the regular terms and conditions of the trade and declaring no conflict of interest would arise regarding the transaction, according to the disclosure.

Listed in 2010, stock price of Malek Spinning remained stuck at floor at Tk 22.30 for more than a year.

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