RN Spinning gets permission to merge with Samin Food

The union is to help the former return to production

| Updated: January 16, 2023 11:15:45

RN Spinning gets permission to merge with Samin Food

The High Court has granted the merger of publicly-listed RN Spinning Mills with non-listed Samin Food and Beverage Industries and Textile Mills, which is expected to help the former get back to production.

Cumilla-based RN Spinning has remained shut since 2019 after a blaze.

The merger scheme was planned so that the listed company could begin production and generate profits for its shareholders, said A Raquibul Islam, company secretary of RN Spinning,

"The merger will improve the company's strength and capital base. We will need to take approval of other regulatory authorities too."

RN Spinning Mills will be relocated to the premises of Samin Mills in Gazipur, Mr Islam added.

Samin Food and RN Spinning Mills are concerns of FAR Group.

RN Spinning Mills made the disclosure on the website of the Dhaka Stock Exchange (DSE) on Tuesday.

As per the terms of the scheme of amalgamation, Samin Food shall be dissolved and all of its assets and liabilities shall be transferred to RN Spinning Mills.

All existing equity shares of RN Spinning Mills held either directly or through nominees shall be scraped.

RN Spinning Mills' existing shareholders will get shares at 1:5.59 ratio. In simple words, they will get one new share of post-merger RN Spinning against their 5.59 shares held before the merger.

The pre-merger RN Sipping Mills has 392.54 million ordinary shares while Samin Food has 233.18 million shares.

As many as 70.26 million new shares will be issued at Tk 10 each by the post-merger RN Spinning.

The total number of shares of the post-merger RN Spinning Mills will be 303.44 million, and its paid-up capital Tk 3.03 billion.

The new entity's authorised capital will be Tk 7.50 billion -- Tk 5 billion of pre-merger RN Spinning plus Tk 2.50 billion of Samin Food, as per the HC order.

Samin Food started operation in 2019. Its textile unit has a capacity of producing 79,848 spindles of cotton, viscose, and CVC yarn annually.

RN Spinning used to produce synthetic and acrylic yarn. It raised Tk 300 million through an initial public offering (IPO) in 2010.

RN Spinning suffered a loss of Tk 7.85 million in the first quarter ended in September of the FY23. In the FY22, it incurred a loss of Tk 35.33 million.

Last week, the High Court approved merger of Far Chemical Industries- a publicly listed textile-based chemical firm with non-listed SF Textile Industries. Again, both companies are FAR Group's concerns.

After the merger, the new entity will be known as Far Chemical Industries.

Presently, FAR Group's three concerns are listed in the stock market-ML Dyeing, RN Spinning Mills and Far Chemicals Industries.

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