Textured Jersey Lanka (TJL) has put its expansion plans on hold as it looks to diverting its funds from the recently-floated public issue of shares (IPO) to acquiring an operating mill in India.
A small portion of the funds obtained through the IPO was invested in addressing bottlenecks within the existing production facility that has contributed to increasing its capacity and efficiency, the company said in a statement issued to the Colombo Stok Exchange on April 25.
Due to pressure from global and macro-economic changes, TJL has decided to hold back the proposed organic expansion within the Avissavella BOI zone, it said.
Expansion would be financed through the acquisition of a fabric operating mill in the South Asian subcontinent, the company said.
In this respect, the funds raised through the IPO would be utilized in acquiring the mill evaluation for which is currently ongoing, it stated.
TJL believes that this would provide faster results than in funding an internal expansion, however, no timeline is given.
Further, the company is said to have incurred an increased cost following the recent fuel price hike by Rs.40 that has resulted in TJL now looking for alternative energy sources. It was noted that this alternative energy source would be obtained through further investments in technology for coal or bio-mass.
These investments are set to provide for future savings on the company’s energy costs, it stated.