A group of investors led by a Chinese company has withdrawn the public announcement of their intention to acquire up to 52 percent shares of Masood Textile Mills. Analysts reported that the transaction would have brought foreign investments to Pakistan upward to $58.4 million.
An analyst told The Express Tribune that political instability in Islamabad could have been one of the many reasons for the group to withdraw its offer.
The group, which included Shandong Ruyi Science and Technology Group, the CEO of Masood Textiles and a member of his family, announced its intent to buy in December 2013. The Competition Commission of Pakistan (CCP) and the Ministry of Commerce of China approved the acquisition, however, the required conditions under the Share Purchase Agreement (SPA) between the sellers and buyer had not been fulfilled within the agreed timeline. The time frame for the public offer was set to expire October 5.
The Faisalabad-based textile mills includes in-house yarn, knitting, fabric dyeing, processing, laundry and apparel manufacturing facilities. It produces value-added textile products, and is expected to increase its amount of exports to the European Union thanks to the GSP Plus status Pakistan has been granted.
According to The Express Tribune, the deal between the Pakistan mill and Chinese group would have been a first of its kind. In addition to Pakistan’s GSP Plus status, the group would have benefited from better cotton prices and cost-effective labor in Pakistan.