Chinese business DEX-I continues pursuit of purchasing Mithun Knitting company
Mithun Knitting, a garment manufacturing company based in Bangladesh, is once again in the limelight as Destination Express International (DEX-I) Limited, a China-based courier company, has reapplied to the Bangladesh Securities and Exchange Commission (BSEC) to acquire the shares of the company's sponsors.
The initial bid by DEX-I was cancelled by the BSEC in October 2024 due to the company's failure to meet regulatory requirements. Specifically, Mithun Knitting had not properly repaid its loans to Basic Bank as directed by the BSEC, leading to the cancellation of the ownership transfer approval.
To complete the acquisition, DEX-I must meet certain conditions set by the BSEC. These include maintaining at least a 30% shareholding in Mithun Knitting and being responsible for repaying the outstanding loan of the company with BASIC Bank. The acquiring company is also required to establish a new board of directors that incorporates new shareholders holding 2% or more of the shares.
Moreover, the BSEC has directed the company to resolve its loan issues with the concerned bank before moving forward with the acquisition process. The commission has also set conditions for the takeover approval, requiring the sponsors and directors to collectively hold at least 30% of the company's paid-up capital at all times.
The political and economic situation in Bangladesh has been improving, which could facilitate the completion of the acquisition process by DEX-I. The company is in discussions with the bank to settle the loan issues in order to proceed with the takeover.
It is important to note that Mithun Knitting's factory in the Chattogram Export Processing Zone (CEPZ) has been non-operational since September 2019, and its lease was terminated in February 2019 due to unpaid dues.
The share transfer of 5,449,058 shares held by the late Md Mozammel Haque's legal heirs and others was to be transferred to DEX-I Limited under a share purchase agreement. The heirs include Rabeya Khatun, Md Rafiqul Haque, Md Mahbub-Ul-Haque, Md Atikul Haque, Md Rabiul Haque, Syeda Hasina Haque, Mahbuba Haque, Mahmuda Haque, Mahfuza Haque, and Monsura Haque.
The BSEC has received the new application from DEX-I Limited and is currently reviewing it. If approved, the acquisition could mark a significant step towards resuming business operations at Mithun Knitting and potentially revitalising the company. The company's share price closed at Tk16 on the Dhaka Stock Exchange today.
Destination Express International (DEX-I) Limited, with its strategic partnership with a world-renowned logistics conglomerate, could bring fresh perspectives and expertise to Mithun Knitting. The company has a strong reputation in the garment industry, particularly in China, which could prove beneficial for Mithun Knitting's operations in Bangladesh.
As the acquisition process progresses, investors and stakeholders will be closely watching developments at Mithun Knitting. A successful acquisition could signal a turnaround for the company and the garment industry in Bangladesh.
The acquisition of Mithun Knitting's shares by Destination Express International (DEX-I) Limited, once completed, could signal a turnaround for the company, given DEX-I's expertise in the garment industry, particularly in China. To facilitate this, DEX-I must adhere to the conditions set by the Bangladesh Securities and Exchange Commission (BSEC), which include maintaining a 30% shareholding, repaying the company's loan with BASIC Bank, and establishing a new board of directors.
The success of this acquisition could potentially revitalize Mithun Knitting's business in the financial sector of Bangladesh, given the improving political and economic climate, and the opportunity to resolve long-standing loan issues with the bank.
