ACI stocks soar on news of Tk 84cr foreign investment
ACI stocks soared yesterday when news broke that its subsidiary ACI Motors is defined to receive Tk 83.99 crore in foreign investment for the expansion of its vehicle manufacturing capacity.
Stocks of ACI closed 2.51 per cent higher at Tk 269 at the Dhaka Stock Exchange (DSE).
The plants involved are of Yamaha motorcycle and agro machinery. The business is also planning to create a plant to put together Foton-branded commercial vehicles.
With the investment, the motorcycle plant's twelve-monthly production capacity will reach 1,40,000 units from 1,08,000.
The investment has been made by Dutch investment bank FMO, United Kingdom's development finance institution Commonwealth Development Corporation (CDC) and Norfund through Bangladesh Managed Account CV, which is a limited partnership.
"We decided to take the equity investments not for money, but also for innovation and utilisation of their experiences," said Pradip Kar Chowdhury, chief financial officer of ACI.
"We wanted to get investment from those that can donate to our business expansion, know-how, and idea generation," he said.
"The CDC can truly add value to your company as it has experience in innovation, artificial intelligence etc," he said.
"All the companies have worldwide exposure, and they'll sit inside our board so we hope that they can donate to improve our company," Chowdhury added.
The ACI will issue 15.55 lakh convertible, non-cumulative preference shares worth Tk 100 each at reduced of Tk 440 per share.
In the event of non-cumulative desired stocks, the dividend is only payable from the web profits of each year. If the company makes no net profit in a year, the arrears of dividend can't be claimed in subsequent years.
"The proceeds of the investment will be utilized for business growth as well for expansion of existing manufacturing facilities of ACI Motors," the company said in a disclosure published on the DSE website yesterday.
The new investment will certainly reduce ACI's shareholding in ACI Motors from 52.70 % to 46.80 %, the company added.
ACI Motors is one of the market leaders in the distribution of agricultural machinery in Bangladesh and the sole distributor of Yamaha motorcycles in the united states.
The FMO will support access to mechanisation for farmers and help ACI Motors increase local value creation in the motorcycle segment, the FMO said about the investment in its website.
Bangladesh is experiencing significant labour shortages during peak crop harvesting seasons and mechanisation can play an integral role in increasing yields and increasing farmers' income.
The FMO's investment is likely to contribute to monetary growth and reduce inequalities and indirectly to zero hunger, it added.
Earlier, in 2020, the FMO bought 23.33 lakh convertible non-cumulative preference shares worth Tk 126 crore.
Of the full total foreign fund, like the previous investment, around 65 per cent will be used as capital expenditures while the remaining as working capital.
Revenue of ACI Motors rose 1.67 per cent year-on-year to Tk 970 crore in the nine-month period of the existing fiscal year, from July 2020 to March 2021. Through the same period, its profit before tax was Tk 91.74 crore.
Its asset was Tk 1,381 crore and liabilities Tk 849 crore by March 31, 2021, based on the financial reports.
ACI Motors offers a line-up of high horsepower agricultural machinery, such as tractors, power tillers, reapers, mini incorporate harvesters and rice transplanters.
It introduced the Sonalika Tractor, which is reported to be specially created for Bangladesh's small sized lands and roads.
In 2017, ACI Motors added China's leading brand Lovol's construction equipment such as for example wheel loaders and mini excavators.
