Alif Group is all set to bring C&A Textiles, which was shut down in 2017 due to loan defaults by its former owners, back into production this month after completing all the necessary work of the factory.
Installation of new machines is now underway after removing unusable old machinery.
After the acquisition in 2021 by Alif Group, the company had said it would return to production in January this year. But its authorities could not keep their word because of some complexities and the lack of necessary machinery.
Now, the company says all the necessary machinery has arrived, and the funding complications are over. C&A Textiles will return to production once the machines are installed.
Md Azimul Islam, the new managing director of C&A Textiles, told The Business Standard, "An initial investment of Tk50 crore will be made to bring the company back to production. That could increase further."
He said the trial run will start in the next one week after the machinery is set up and only then the commercial production will begin.
"Initially, the dyeing unit will start with 100 tonnes of cloth from Alif Industries. The daily production capacity of the company is 20 tonnes. However, initially, the factory will run at 50% capacity. It may take another month to go into full production," he added.
C&A Textiles factory is situated at the BSCIC Industrial Area in Kalurghat of Chattogram. The former owners of the company built the factory on a plot taken from BSCIC on a 90-year lease.
They raised Tk45 crore by issuing shares to import new machinery and expand the factory on vacant areas of the plot.
However, due to loan fraud, the company stopped production in 2017. Due to this, its previous owners could not construct the building.
Now, after the acquisition, new owner Alif Group is expanding the factory to increase its production capacity.
During a visit, it was seen that the work was going on in both mechanical, electrical and civil parts to bring the company back to production fast.
It was also seen that many of the company's heavy machinery has been damaged due to the long shutdown. Almost all the machines in the dyeing unit are out of order, so they will be set up anew. However, most of the machines in the garment unit are reusable and ready for production.
Two other companies – Alif Manufacturing and Alif Industries – of Alif Group are also listed on the capital market.
The group has acquired both companies from the capital market's over-the-counter (OTC) market. Alif Group has acquired C&A Textiles in the hope of making a profit by utilising the experience of managing closed and loss-making companies.
Azimul Islam said, "The acquisition of C&A Textiles would save the investors. Because its owners were not available. It became a bank loan defaulter. The government's utility bill was due. Everyone will benefit if the company is launched now."
Company officials said that they have installed boilers, a water system in the factory's own submersible system, compressors, two generators for gas lines, one generator for power lines and transformers to start production of the dyeing unit.
At present, the dyeing unit has the capacity to dye 20 tonnes of cloth daily. There is also demand for the products, they added.
C&A Textiles raised Tk45 crore from the capital market with an Initial Public Offering (IPO) in 2015.
According to its prospectus, the company paid Tk30.87 crore towards loan repayments and business expansion.
In June 2017, C&A Textiles announced a sudden shutdown of production for renovation work, and its offices have remained closed since then.
In February 2021, the Bangladesh Securities and Exchange Commission (BSEC) restructured the underperforming company's board, appointing seven directors.
C&A Textiles was incorporated in 2001 and started commercial operations in 2003.
On 29 July 2020, BSEC found that C&A Textiles' Managing Director Rukshana Morshed, Director Sharmin Akther Lovely, and Bangladesh Shoes Industries Limited had together sold around 1.22 crore shares of the company without prior declaration, taking around Tk12 crore from these sales.
As a penalty for violating several rules, the regulator later fined them Tk19 crore and banned them from assuming the roles of directors at any other listed company.