Nishat Mills nears $4.5m deal to acquire Danish firm

KARACHI: Pakistan’s textile giant Nishat Mills Limited (NML) is set to buy 100 percent stake in a Denmark’s fabrics manufacturer Wernerfelt A/S, against a settlement of $4.5 million, according to an announcement made on Friday.

Wernerfelt A/S has 80 years’ experience in developing and supplying fabrics for personal protection and workwear, which NML to acquire from the seller Lars Lauridsen Holding ApS, a company incorporated under the laws of Denmark.

“The Board of Directors of Nishat Mills Limited…has decided to acquire 100% of the issued share capital (along with transfer of complete management control) of Wernerfelt A/S by the company and/or Nishat International FZE, Dubai (a wholly owned subsidiary of the company) for a consideration up to $4,500,000,” NML company secretary Khalid Mahmood Chohan informed the Pakistan Stock Exchange.

The aforesaid acquisition, however, would be subject to signing of definite agreement(s) between the parties and applicable regulatory approvals, he added.

NML said it would sign any or all documents/arrangement with the seller, including but not limited to a memorandums of understanding.

According to Wernerfelt A/S, the company benefits from a heritage in the textile industry, with more than 80 years’ experience in developing and supplying fabrics for personal protection and workwear. It has also industry partners in China, Korea, India and Pakistan, while a laboratory facility in Denmark helps the company maintain its specifications and quality. Nishat Mills, one of the largest textile companies in Pakistan, is engaged in textile manufacturing as well as spinning, combing, weaving, bleaching, dyeing, printing, and stitching. It also deals in yarn, linen, cloth, and other goods and fabrics made from raw cotton, synthetic fibre, etc.

NML is a flagship company of Nishat Group that is a multinational conglomerate. The group also owns Nishat Chunian, DG Khan Cement, and MCB Bank.

Nishat Chunian partially shut down its operations in Pakistan last month, blaming current market conditions in the country.

“The company has decided to temporarily close 51,360 spindles after one month due to market conditions. However, the remaining units are operating normally. Company will restart these spindles as soon as market conditions improve,” the company said in a stock filing in December, 2022.

The textile manufacturer declared the operations’ suspension amid a prevailing economic downtrend in the country. Before that, Kohinoor Spinning Mills Limited had also announced closure of its operations giving similar reasons.

Another company owned by Nishat Group DG Khan Cement has started exporting cement to the US. It got an order to 600,000 tonnes of low alkali cement, whose two consignments have already been sent.