ACI Motors gets 84C in foreign investment

It really is now eyeing capacity expansion, alongside establishing an assembly plant for Foton commercial vehicles

ACI Motors, a subsidiary of Advanced Chemical Industries (ACI) Ltd, is defined to expand its motorbike and farm machinery equipment capacity after receiving Tk84 crore from three foreign financiers.

UK state-owned development lender Commonwealth Development Corporation (CDC), Norwegian state-owned investment fund Norfund, and Dutch development financier FMO will be the foreign investors.

ACI Motors, within its continuous expansion in farm machinery capacity and consolidate its market leadership, has been aiming to assemble combine harvesters.

Following foreign investment, it really is now eyeing capacity expansion, alongside establishing an assembly plant for Foton commercial vehicles.

Foton is among the fastest-growing Chinese brands which have a good amount of market share in the industry vehicle segment.

According to FH Ansarey, managing director of ACI Motors, Tk84 crore received as investment will be utilized as capital expenditures, as the remaining amount will be spent as working capital.

With the influx of funds, the Yamaha motorcycle manufacturing facility would also start to see the annual capacity rise to 1 1,08,000 units immediately, which is raised to 1 1,40,000 units later.

The brand new investment will dilute ACI's shareholding in ACI Motors from 52.70% to 46.80%.

Earlier last year, FMO had invested $15 million in ACI Motors.

Norfund, CDC, and FMO have previously invested in Bangladeshi SMEs through Frontier Fund- one of the first specialized SME funds in Bangladesh.

Frontier Fund offers opportunities for the growth and development of companies looking for capital.

Norfund invested $10 million of a complete of $88 million in this fund, which is managed by a Bangladeshi subsidiary of Swedish Brummer and Partners- as an area adviser to the investors.

It has been reported that the investors will get ACI Motors Limited's convertible preference shares at Tk540, where Tk440 will be the premium against the facial skin value of Tk100.

The company will issue 15.55 lakh convertible non-cumulative preference shares worth Tk100 each at reduced of Tk440 per share.

Against the equity instrument, the investors would receive dividends as much the company's board recommends for the overall shareholders, and the investors would obtain preference shares changed into ordinary shares prior to the company goes public in the coming years.