Hayleys MGT Knitting Mills PLC, fabric supplier in Sri Lanka, has announced plans to float a rights issue to raise Rs 914 million for expansion and to strengthen the company’s balance sheet, subject to Colombo Stock Exchange (CSE) and shareholder approval.

The Board of Directors of the company has proposed the issue of two new ordinary shares for every ordinary share held, at Rs 9 per share. The current stated capital of the company is Rs 527,856,000/- represented by 50,781,106 ordinary shares.

The announcement of the proposed rights issue came as Hayleys PLC, the major shareholder in Hayleys MGT Knitting Mills, reported record nine month net profits of Rs 3.6 billion, even after losses incurred by its textile operation, which is undergoing restructuring.

In a filing with the Colombo Stock Exchange, the Board of Directors of Hayleys MGT Knitting Mills said the proceeds of the proposed rights issue would be used to strengthen the company’s Balance Sheet, invest in equipment to manufacture higher value fabric, invest on energy saving initiatives and upgrade its Enterprise Resource Planning (ERP) System.

Hayleys MGT Knitting Mills produces up to 250,000Kgs of Single Jersey, Interlock, Fleece, Polar Fleece, Rib, Pique, Structures, Pointelles and Marl fabrics per week at its 33 acre plant at Narthupana Estate in Horana. The company is a leading weft knitted fabric supplier to top international brands such as Decathlon, M&S, George and Nike with an annual turnover in excess of $50 million.